Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

EDWARD BERRY AND DORIS EILLEEN WARD (MARRIAGE ENABLING) BILL [Lords]

Read the Third time and passed, without amendment.

BRITISH OLIVETTI LIMITED BILL [Lords]

EAGLE & GLOBE STEEL LIMITED BILL [Lords]

As amended, considered; to be read the Third time.

PIER AND HARBOUR PROVISIONAL ORDER (GREAT YARMOUTH WELLINGTON PIER) BILL

Considered; to be read the Third time upon Thursday.

Oral Answers to Questions — ORAL ANSWERS TO QUESTIONS

Mr. Speaker: I do not want to be unreasonable, but if questions could be succinct and to the point, and answers the same, that would be of enormous help.

EDUCATION AND SCIENCE

Assisted Places Scheme (Boarding Schools)

Mr. Beith: asked the Secretary of State for Education and Science what arrangements he has proposed to public boarding schools with high fees to enable them to take part in the assisted places scheme.

The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): Perhaps I might first say that my right hon. and learned Friend the

Secretary of State sends his apologies because illness prevents him from attending the House today.
Section 17 of the Education Act 1980 excludes boarding fees from the scope of the assisted places scheme, but the Headmasters' Conference has announced that some of its schools are planning to use their own bursary funds to assist with boarding fees for pupils holding assisted places. My right hon. and learned Friend has warmly welcomed this initiative.

Mr. Beith: We hope that the right hon. and learned Gentleman the Secretary of State will soon be better. However, has the Secretary of State not written to some of these schools indicating that there is a basis for a scheme involving the assisted places money plus these extra funds? Does not this represent a change in the scheme from what the hon. Gentleman himself has argued, as one mainly based on the old direct grant schools, and does it not mean that money will go to children who might have gone to these schools anyway, instead of being deployed in the State schools?

Dr. Boyson: I am sure that the hon. Member understands that one of the problems with the direct grant schools is the distribution of the assisted places scheme, as compared with the oldest direct grant schools, which are often centralised in certain areas of the country. My right hon. and learned Friend welcomed an opportunity of possibly providing boarding places from which the cost of boarding was covered by bursaries from the schools themselves—I believe that 80 schools, offering about 400 places, have mentioned this—but where the only sums paid by the State were the day school fees, which we shall look at carefully, because, obviously, with a limited sum of money, one cannot increase the number.

Mr. Adley: Has my hon. Friend noticed that at a time of economic difficulty many people continue to make enormous sacrifices in order to send their children to schools in the private education sector? Does he agree that what we should do is try to find ways in which the State sector can learn from the success of the private sector, rather than that Labour Members, as the hon. Member for Bedwellty (Mr. Kinnock) is about to do, should continue their


wheedling campaign of envy against the private sector?

Dr. Boysan: I think that one thing that the independent sector can teach the State schools is the ultimate response to parents and what they want. This is not a reflection upon the teachers in the State system or the parents. Independent schools will exist only as long as they give an automatic response to what parents wish.

Mr. Kinnock: Reverting to the question that was tabled, may I ask what is the hon. Gentleman's view of local authority finances being used to top up the assisted places scheme to provide places at boarding schools, in view of the figures provided to us by the Chartered Institute of Public Finance and Accountancy indicating that there are local authorities which are spending more on buying places in the private sector than on financing books in their own schools?

Dr. Boyson: My answer to the hon. Gentleman's second point is that I do not think that the two things are related. Obviously children who attend schools in the State sector will have to be paid for. In Wirral—one of the authorities mentioned—more is spent on toilet paper than on special education. That does not mean that those schools should not have toilet rolls. A comparison between the two is meaningless. If local authorities decide, within their rights, that the education of pupils can best be served by sending them on bursaries to schools at which the State pays the day fee, that will be allowed.

University Teachers (Pay and Conditions of Service)

Mr. Ancram: asked the Secretary of State for Education and Science when he expects to be in a position to make a statement on the university teachers' pay settlement.

Mr. Hal Miller: asked the Secretary of State for Education and Science when he expects to reach a decision on the pay of university teachers.

Mr. Canavan: asked the Secretary of State for Education and Science whether he will make a statement about the Association of University Teachers salaries claim.

Dr. Boyson: I hope that a meeting of the negotiating committee can be arranged very shortly.

Mr. Ancram: Is my hon. Friend aware that great frustration and domestic difficulty are being caused to university teachers in my constituency because of the delay in announcing the decision? Is he further aware that they are particularly frustrated because they have completed their side of the negotiations in line with Government directions? Will he give an assurance that an announcement will be made soon?

Dr. Boyson: We hope that a meeting will be arranged shortly. If the Clegg Commission had reported when it had intended to, the payment would still not have been made by September. We trust that the issue will be settled well before then.

Mr. Miller: Does my hon. Friend understand that the main concern of such articulate, not to say literate, people is that they may be caught—as they were before—by a policy change? Does he accept that their anxieties rest on that score, rather than on the amount of the increase at issue?

Dr. Boyson: I understand my hon. Friend's point. I know that there is strong feeling in the country on this issue. I have received letters, as I am sure every hon. Member has, about the settlement. However, we intend to call a meeting shortly to sort out the matter.

Mr. Canavan: Why has there been a delay of more than seven weeks since the pay proposals were first agreed with the employers and set within the Government's cash limits? Will the Minister assure us that he will not allow university teachers to be used as scapegoats for the failure of the Government's counter-inflation policy, particularly in view of yesterday's announcement that Cabinet Ministers will get as much as £90 a week extra, which will take them up to over £30,000 a year?

Dr. Boyson: One of the concerns of university teachers is the way in which they were treated in 1975 by the Labour Govt. The hon. Gentleman did not mention that. That is why university teachers feel so strongly about this matter. We


are considering cash limits and comparability. As I have said, we shall call a meeting shortly.

Mr. Rhodes James: Is my hon. Friend aware that university teachers will never forget the manner in which they were treated in 1975? Will he give an assurance that there will be no repetition of that lamentable episode?

Dr. Boyson: The Government do not intend to treat university teachers differently from other people, or in the way that they were treated in 1975.

Mr. Race: Has the settlement that was agreed between the employers and the unions on university teachers' pay been approved by the appropriate Cabinet sub-committee? Clearly, a Cabinet sub-committee is vetting public sector pay. The hon. Gentleman has only to tell the House whether the Government approve the settlement reached between the unions and the employers. Do the Government approve?

Dr. Boyson: There is a proper place in which to make this announcement. It will not be made to the hon. Gentleman in this Chamber. Presumably, trade unionists on the Opposition Benches would expect proper negotiations to take place. The recommendation will pass from committee A to committee B, and that is where the announcement will be made.

Mr. Beith: Will the Minister give a specific assurance that the settlement that is reached will not be subject to the new 9¾ per cent. pay policy?

Dr. Boyson: Committee B has not yet been called. When the committee is called, and when the Government are represented, a statement will be made about the acceptability of the settlement that came from committee A.

Mr. John Patten: Despite my hon. Friend's remarks about the original September announcement in the Clegg report, does he agree that it is unfair that university teachers should suffer from the prevarications and incompetence of the Clegg Commission in the meantime?

Dr. Boyson: I agree with my hon. Friend. As soon as teachers indicate that they would prefer direct negotiations to waiting for the Clegg Commission, we

shall agree to undertake them.

School Books

Mr. Cryer: asked the Secretary of State for Education and Science what discussions he has had with local education authorities regarding the provision of school books.

The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): Officers of my Department and of the local authority associations are currently engaged in detailed discussions about the Government's expenditure plans and their implications for local authority expenditure, including expenditure on school books and equipment.

Mr. Cryer: Has the Secretary of State changed his mind since attending the press conference of the National Association of Head Teachers, where he stumbled into the vicious and hardhearted notion that parents should buy school textbooks? Has he seen that the proposals put forward by a headmaster of a Solihull comprehensive school has been condemned as moral blackmail? Does he not know that all the teaching unions have condemned the proposal that parents should be forced and blackmailed into buying textbooks? Is this not a demonstration of the Government's warped and corrupt priorities? They are forcing parents to buy books, yet they are spending £10·7 billion on defence.

Mr. Macfarlane: At the risk of not being succinct, I should point out that the House must understand precisely what has occurred during the past few weeks. Once again the hon. Member for Keighley (Mr. Cryer) has exaggerated his case. His remarks will not persuade any Conservative Members. He should understand that as he was not present at the press conference that took place in Cheltenham he is unaware that my right hon. and learned Friend did no more than echo the long tradition that parent-teacher associations raise money to buy books and equipment for schools. Such exaggeration was highlighted a few weeks ago. I hope that I shall put the record straight when I point out that in response to a question by my hon. Friend the Member for The Wrekin (Mr. Hawksley) on 25 June, my right hon. and


learned Friend made it clear that an exaggerated article appeared in The Teacher, which indicated that there were no textbooks in a particular school. We have looked into the matter and discovered that it involves a comprehensive school for 12- to 18-year-olds. The school has 26,000 textbooks on its premises. In addition, the library has 8,500 books. I hope that Opposition Members will understand once and for all that they do not serve national or constituency interests when they make such exaggerated claims.

Mr. Greenway: Does my hon. Friend agree that there is a large amount of hard and software in use in schools, including photocopiers, which is very expensive? Does he accept that there has been a change in the pattern of education, particularly at secondary level, and that expenditure on books will not reach former levels because there is so much alleviating expenditure in other areas?

Mr. Macfarlane: My hon. Friend has made an accurate historical survey of the past 10 years. Over the past 10 or 15 years there has been a wider use of different equipment in the classroom. Expenditure may therefore have got out of balance in that area.

Mr. Kinnock: Has not the situation in Britain's schools been grossly misrepresented? Does the hon. Gentleman accept that, according to The Times Educational Supplement, parents raised £23 million last year? Does he accept also that much of that money is of dire necessity because of the shortage of school books? Until the hon. Gentleman has found a way to replace the irreplaceable—the educational value of school books—will he confine himself to fulfilling his duty? Will he ensure that sufficient supplies of necessary materials are available to children in schools? Will he stop being complacent and atavistic in his attitude towards what has gone on in the past?

Mr. Macfarlane: Nobody in the Department of Education and Science is complacent. One source of gross misrepresentation has been the behaviour of the hon. Member for Bedwellty (Mr. Kinnock).

Mr. Kinnock: The hon. Gentleman will not get away with that.

Mr. Macfarlane: The one person who has not got away with it is the hon. Gentleman. If hon. Members read the reply that my right hon. and learned Friend gave on 25 June, they will see that the source of information about that school in Staffordshire—as reported in The Teacher—was the hon. Member for Bedwellty. There is no truth in that story.

Mr. Kinnock: In view of the fact that the reference in The Teacher was obviously hyperbole, and that the article contained a misprint in that it referred to "Wellington", not Werrington, I fail to see how morale was affected in any of the ways that the Under-Secretary has suggested. Is it not a fact that until his right hon. and learned Friend went to the extraordinary pains and expense of getting a planted question on this matter no one was affected by it?

Mr. Macfarlane: Methinks the hon. Member doth protest too much. The only person who has engaged in hyperbole is the hon. Member for Bedwellty. It is a shame that once again his reputation is somewhat tattered and torn. I am sorry not to be succinct on this occasion, but I must point out that the Government have announced an increase in expenditure of £35 million over the next three years. In addition, the Government have allowed for an increase of 2 per cent. in expenditure on books in the current financial year.

Mr. Gummer: We very much welcome that increase in expenditure. Will my hon. Friend talk not only to the local authorities but to his right hon. Friend the Secretary of State for the Environment, because the rural areas are still suffering from the gerrymandering of the rate support grant? Is my hon. Friend aware that this means that schools in rural areas are doing less well than those with over-provision in many of the large urban areas?

Mr. Macfarlane: That is a valid point. I hope that a dialogue will take place between my Department and the Department of the Environment.

Mr. Cryer: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I give notice that I shall seek leave to raise this matter on


the Adjournment at the earliest opportunity.

Mr. Christopher Price: asked the Secretary of State for Education and Science what was the total expenditure on school textbooks and other classroom materials in each of the last five years.

Dr. Boyson: The information for the financial year 1979–80 is not yet available. Expenditure in real terms for the previous four years was respectively—£194 million, £188 million, £181 million and £187 million.

Mr. Price: Is the Minister aware that those figures show that it is important to try to maintain the level of expenditure? Following the answers that were given to the last question, is he aware that when fees were made illegal in grant-aided schools under the 1944 Education Act, it was always considered that charging money for textbooks was included in that provision? Is he now saying that the Government take the opposite view and that they believe that the 1944 Act did not cover payment for school books?

Dr. Boyson: Some years ago when I was teaching in schools, and the hon. Member was a teacher himself, I remember money being used from the school fund, raised by parents, to provide sixth form books when there was a shortage. I was trying to help the hon. Member by giving this year's figures but he has chosen to make cheap points. The figures this year are likely to be the same in real terms as those for last year, if not slightly higher.
I realise that under the 1944 Act it is the duty of local education authorities to provide the basic structure within schools without fees, but that does not stop parents, wherever they wish, from voluntarily giving money to schools for additional facilities. Such facilities may include books for the library or for use within schools.

Mr. Forman: Is my hon. Friend aware that the estimate of £35 million mentioned in the last question for school equipment and books will be very welcome? Can he assure the House that the money that is earmarked for that purpose over that period will be spent

by local education authorities for that purpose?

Dr. Boyson: I am glad that my hon. Friend welcomes the £35 million. We have put back that amount because it is the amount thtat would have been spent had there not been cuts by the Labour Government in 1976–77. We are restoring the situation to what it would have been without those cuts. On the second point, one cannot have local democracy and at the same time put a gun at local authorities' backs every time they make a decision. All that we can do is to indicate that we consider that books are important as part of the basic structure of school facilities and the education of children, and any money spent on them is certainly never wasted.

Mr. Flannery: Will the Minister stop pretending that there is not a serious crisis in Star schools over school textbooks? Such a crisis exists, and if the Minister will not accept what has been said, quite correctly, from this side of the House, will he ask the Publishers Association, which has repeatedly told us recently that the drop in the sale of textbooks in schools is catastrophic? The association is deeply worried about the situation. What has the Minister to say about that?

Dr. Boyson: I always enjoy the hon. Member's interventions. He is indulging in hyperbole, in the same way as his hon. Friend the Member for Bedwellty (Mr. Kinnock) did. The figures for money spent on school books are largely static in real terms. Schools can always use more books. It would be interesting to know the lifetime of books in schools today, compared with 20 years ago. There was a time when books were replaced every five years, and it would be interesting to have comparisons of figures for the past 20 years.

Higher Education

Mr. Montgomery: asked the Secretary of State for Education and Science what proportion of the 18-year age group now enters some form of higher education; and what proportion of that year group entering higher education is expected in the coming years.

Mr. Macfarlane: In the academic year 1979–80 provisional estimates for Great


Britain are that new young home entrants constituted 12 per cent. of the 18-year age group in higher education. Over the next four years this percentage is expected to remain at about that level.

Mr. Montgomery: Will my hon Friend confirm that school leavers with good A-levels should have no difficulty in pursuing a course of higher education? Does this not apply particularly to those who wish to study science or technology?

Mr. Macfarlane: Yes, that is the case. The opportunities for school leavers generally at universities and polytechnics will not decline. Provided that the student attains a reasonable standard in his sixth form he can expect to find a suitable place in higher education. While there can be no direction on our part, students would be wise to consider seriously courses in science, engineering and technology generally. That is the thrust of the Government's plans.

Mr. Gregor MacKenzie: What steps is the Minister taking to encourage 18-year-olds to go into applied sciences, to read engineering, and so on? There is a great shortage of young scientists thoughout the country, and not enough encouragement is given by Government to young people to enter these occupations.

Mr. Macfarlane: I do not think that that is strictly accurate. Over the past three or four years there has been a growing awareness of the paucity of such students in schools and colleges. The previous Administration and this Government have initiated a number of activities, such as the standing conference on school science and technology, the establishment of SATROs—the science and technology regional organisations—and the Finniston committee of inquiry. There is an upturn in the numbers applying for science and engineering courses, particularly among young girls in the latter discipline.

Dr. Hampson: Surely the question of increasing the number of entrants to higher education at the age of 18 cannot go to the top of the educational agenda now, when there is a need to expand the number of part-time places, particularly to encourage professional people to return to courses to update their knowledge and skills?

Mr. Macfarlane: My hon. Friend highlights the fact that flexibility and retraining are important. I hope that all those engaged in education will acknowledge that.

Mr. Freeson: The Minister sounds rather complacent about this matter. How much emphasis is placed on the question of technical education in the review that is being undertaken of provision for 16 to 19-year-olds? I believe that the Minister told us that the result would be available in he autumn.

Mr. Macfarlane: I confirm that. I hope to report to the House by the end of November. Certainly, it is an all-important subject. The aspect of technical education is something that has emerged from the curriculum survey and our views and findings on that will be made known before the end of the year.

Inner London

Mr. Peter Bottomley: asked the Secretary of State for Education and Science when he expects to publish the conclusions of the inquiry into the education service in inner London.

Mr. Guy Barnett: asked the Secretary of State for Education and Science whether he intends to publish the report of the committee currently examining education in inner London under the chairmanship of Lady Young.

Dr. Boyson: As my right hon. and learned Friend explained in reply to a question by the hon. Member for Battersea, South (Mr. Dubs) on 11 June, when the Government have completed their examination, he will make a statement to the House.

Mr. Bottomley: Am I right in believing that any decision announced by the Government will be based on the interests of children's education rather than on political dogma? Even if it is decided that ILEA should remain unified for a time will we be able to continue the debate so that children who have passed the secret 11-plus will have a better opportunity of attending the secondary school of their choice? Is my hon. Friend aware that in my constituency that is not necessarily so at present?

Dr. Boyson: The interests of children's education will be paramount in any decision. I agree with my hon. Friend's second point. ILEA is one of the few authorities that handicaps children who prove themselves very bright at the age of 11.

Mr. Christopher Price: That is untrue.

Mr. Guy Barnett: Does the hon. Gentleman's original answer mean that the report will not be published? If so, what do the Government have to hide?

Dr. Boyson: The Government have nothing to hide. We are prepared to look at the question of ILEA, which was considered by the Herbert Commission in 1963, and in the Marshal and the Baker reports. It is important to get the matter settled this time. Perhaps I might clarify my answer to my hon. Friend the Member for Woolwich, West (Mr. Bottomley) by saying that, within ILEA, if a child has a top grading, the parents often find that instead of going to a school of their choice the child is moved elsewhere to balance school intakes.

Mr. Kenneth Baker: Will my hon. Friend ensure that the committee examining the future of ILEA considers the option canvassed in one newspaper, namely, that those inner London boroughs that want to withdraw should be allowed to, provided that proper financial arrangements can be made? Does he accept that that would involve local communities more directly in their own educational services, which is what happens in the remainder of the country?

Dr. Boyson: I am sure that that is one matter that will be considered by the committee, together with the right of withdrawal of individual authorities, the break-up of the authority, grouping or even direct election to ILEA.

Mrs. Ann Taylor: Can the Minister confirm that the Greater London Conservative Advisory Committee has recently pronounced against the break-up of ILEA? How many submissions has the Minister's Department received on that matter, and what proportion has been against the break-up of ILEA? Why has his Department not undertaken to have direct consultations with parents in the authority's area, when it is clear from the

spontaneous reactions of parents in London that they are very much against the break-up of ILEA?

Dr. Boyson: Considerable numbers of individuals and groups have written to my Department. I have not seen the report that the hon. Lady mentioned. I shall look into the matter and make sure that she has a copy. If it comes from the Greater London Conservative Advisory Committee it will be of great benefit to the House. On the hon. Lady's second point, if a decision is made by the Secretary of State that there should be an alteration in the arrangements for inner London, further discussions and debate will take place.

University Technicians (Pay and Conditions of Service)

Mr. Dalyell: asked the Secretary of State for Education and Science what he is doing to study the comparative pay of technicians working for universities, with those of outside industry.

Dr. Boyson: A comparative study of the pay of university technicians has been referred to the Standing Commission on pay comparability, and a report is expected by the end of the month.

Mr. Dalyell: Does the Minister consider that technicians' pay awards should be determined by cash limits, or by pay comparability?

Dr. Boyson: I do not know what the report will say. I know the hon. Gentleman's concern. It is important that universities have proper laboratory back-up. We have tried to hasten the report. When we have it, we shall consider the matter further.

School Leaving Age

Mr. Hooley: asked the Secretary of State for Education and Science if he will now consider seeking to raise the school leaving age to 17 years.

Mr. Macfarlane: No, Sir.

Mr. Hooley: Is the Minister aware that 500 boys and girls applied for four jobs at a shop in Sheffield the other day? As the Government are so grotesquely incompetent in providing work opportunities for our boys and girls, will they consider expanding full-time education opportunities so that these boys and girls can


train for a useful career for the future, when we have a civilised Government?

Mr. Macfarlane: I do not believe that raising the school-leaving age to 17 will necessarily solve the problems to which the hon. Gentleman rightly draws our attention. The message generally is that more flexibility is required to assist earlier training in schools and other educational institutions to match national needs. Raising the school-leaving age to 17 would increase expenditure by about £300 million, and I am not convinced that it would match national needs.

Mr. William Shelton: Will my hon. Friend consider whether students could leave school before the age of 16, in circumstance where they would continue in a learning environment?

Mr. Macfarlane: Yes. The matter is considered regularly. In recent months my right hon. and learned Friend has been asked to consider proposals for more flexible school leaving arrangements, and the matter is under consideration.

Mr. Spriggs: Will the Minister reconsider his reply to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), because the situation has reached proportions of national shame, with 2,000 school leavers appearing before selection officers for three technical positions?

Mr. Macfarlane: I do not believe that I ignored the matter that the hon. Member for Sheffield, Heeley (Mr. Hooley) raised. We are aware that there is a grave problem, but we are aware also that over the next couple of years economic recovery is our most important problem. I do not wish to stray on to employment matters, but it would be interesting to know how many semi-skilled and skilled jobs are on offer. That is why I mentioned earlier training in the school environment.

Mr. Alexander: Instead of obliging youngsters to stay on at school until the age of 17, would it not be preferable to encourage them to undertake further education and training after leaving school, bearing in mind that the majority of youngsters who cannot find jobs have left school without training or the ability to do skilled work?

Mr. Macfarlane: There has been an absence of such provision in schools over the past 15 years. Many local authorities advertise fully the advantages of further education, which the Department of Education and Science welcomes. However, this is a matter for local authorities.

School Premises (Community Use)

Dr. Hampson: asked the Secretary of State for Education and Science what steps he is taking to encourage the greater use of school premises out of school hours.

Mr. Macfarlane: The Government's policy is to encourage the fullest possible use of school premises by the community. The Department and the Welsh Office have undertaken a sample survey of the extent to which schools are used for this purpose, and my right hon. and learned Friend expects to receive results shortly.

Dr. Hampson: Bearing in mind the tremendous investment in school buildings and facilities, does my hon. Friend agree that local authorities place far too many restrictions on their use, particularly at a time when the prospects for young people who are not fully qualified are pretty dim and when we need more teaching of mathematics and science? Will my hon. Friend encourage local authorities to make better use of school facilities, particularly in regard to those critical aspects?

Mr. Macfarlane: So far as we are entitled and able to do so, I assure my hon. Friend that we shall endeavour to do that. The greater use of schools and educational establishments by the community can be of enormous benefit. I hope that local authorities and teachers will consider removing any barriers that they may have created to the wider use of school premises. School premises have an enormous part to play in any community.

Mr. Arthur Lewis: Will the Minister accept that I consider that that is a good idea? However, can he assure me that in areas such as my constituency, where such provision is necessary, councils will not be accused of wasting money on overtime or employing more caretakers? Will he assure us that there will be no attempt to cut expenditure on such provision?

Mr. Macfarlane: That is a matter for the London borough of Newham. The


hon. Gentleman must understand that the use of school premises is a matter for local authorities and head teachers, who must resolve questions of charging and cost.

Mr. Nicholas Winterton: The hon. Member for Newham, North-West (Mr. Lewis) has raised an interesting issue. Is my hon. Friend aware that the problem of the addtional use of school premises often comes down to whether caretakers are prepared to allow bookings to be made? As we do not want caretakers to work too long hours, is there any way in which organisations seeking to use school premises could attend to the premises by cleaning and setting out the facilities?

Mr. Macfarlane: My hon. Friend has raised an interesting and important aspect of the problem. In the final analysis, it is up to everyone in local authorities and schools to try to eliminate the existing barriers. I have no doubt that the barriers exist, and I hope that all concerned will get together to thrash out the problems.

Mr. Armstrong: Instead of passing the buck to local authorities, will the Minister take the initiative and send a circular to authorities encouraging them to make use of facilities provided at public expense, particularly so that they can employ more people in the present desperate situation and ensure that facilities are fully used?

Mr. Macfarlane: It is not a question of passing the buck. The right hon. Gentleman was a Minister at the DES, and he knows what the 1944 Act permits. We appreciate the points that he has made, but he must understand that local authorities have the final decision. The previous Administration sent out a circular and we have conducted a sample survey of some 2,000 primary schools and 1,000 secondary schools to find out precisely what provision is made. As soon as the results are to hand, we shall tell the House.

Voluntary and County Schools

Mr. Speller: asked the Secretary of State for Education and Science when he will make an order to fix the time within which voluntary and county

schools should alter the composition of their governing bodies to conform to the requirement of the new Education Act.

Dr. Boyson: We made it clear to the House during the passage of what is now the 1980 Act that the further application of the new provisions would be a gradual process, and we have no immediate intention of making orders under section 2(11) to impose a statutory requirement to change instruments of government already in force.

Mr. Speller: While welcoming the further implementation of the parents' charter, may I ask my hon. Friend whether he does not think that the rather open time scale, with the local government election cycle pending from spring next year, will lay us open to a certain amount of gerrymandering of time scales, if not, indeed, of boundaries?

Dr. Boyson: I take my hon. Friend's point. Our information is that an increasing number of schools are appointing parent governors, elected from the parents' body, and teacher governors. It is our intention to allow that movement to continue. When we find that certain authorities are taking no action, we shall introduce the order to bring everybody into line.

Regional Advisory Councils

Mr. Stan Thorne: asked the Secretary of State for Education and Science whether he has yet decided upon the future role, if any, of regional advisory councils.

Dr. Boyson: The regional advisory councils were set up and are maintained by their constituent local education authorities. These authorities will no doubt consider the future role of the councils in the light of future developments nationally.

Mr. Thorne: Does not that reply suggest that, yet again, the Department has no policy in this area? Will the Minister clarify the matter?

Dr. Boyson: The Department has a policy, and part of it is to consult teacher associations, university vice-principals and heads of polytechnics. The regional advisory councils are the area councils


that represent all parts of higher education, and they have played a full role. We cannot say exactly what they will do in the new set-up that is likely to emerge, but I have no doubt that they will evolve a useful role.

Dr. Hampson: Is it not about time that these inept bodies were abolished?

Dr. Boyson: That is a straight and honest statement. It is interesting to note that such statements come only from this side of the House. I know my hon. Friend's view on this question, but they are not necessarily held by everybody else in the country or even by everyone on this side of the House.

Teachers (Specialist Subjects)

Miss Wright: asked the Secretary of State for Education and Science if he is satisfied with the numbers of mathematics, science and foreign languages teachers in England; and if he will make a statement.

Mr. Kenneth Lewis: asked the Secretary of State for Education and Science what steps are being taken to increase the numbers of mathematics teachers in schools.

Mr. Macfarlane: No, Sir, my right hon. and learned Friend is not satisfied. There is a persistent shortage of some subjects to which training institutions are giving priority, but recruitment is falling short of its targets. The Government's special schemes of training, retraining, and further training are to continue to 1982–83, and we are shortly to discuss further measures with representatives of the local education authorities.

Miss Wright: Does the hon. Gentleman accept that if he is falling short of recruitment targets in the present economic situation, that says a great deal about the type of recruitment and training schemes? Is he aware that both parents and teachers are concerned about the present situation, where many classes are being taught by comparatively inexperienced teachers who, however dedicated they may be, are not qualified in the appropriate subject? Will he do something to ensure that recruitment and training schemes are urgently stepped up?

Mr. Macfarlane: The hon. Lady must understand that we are taking a number

of initiatives, both with local authorities and with other employers of labour who have personnel who are retiring, perhaps with science degrees. We are trying to get them to come back for retraining, and a number of teachers have been recruited in that way. I do not underestimate the persistent problem that we have had for a number of years. We are trying all possible remedial action to deal with it.

Mr. Lewis: Is my hon. Friend aware that in this microchip age, all of us—Government, industry and the country as a whole—must get our sums right, and that mathematics will be vital? Will he encourage people in the Civil Service, where there are to be a large number of redundancies, to come out and be retrained to teach in our schools?

Mr. Macfarlane: My hon. Friend has raised an interesting matter, to which we shall give close attention.

PRIME MINISTER (ENGAGEMENTS)

Mr. Newens: asked the Prime Minister if she will list her official engagements for 8 July.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with Dr. Albrecht, the Minister President of Lower Saxony. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Newens: When will the Prime Minister recognise that the massive increase in unemployment, the dumping of cheap exports in this country, high interest rates, an overvalued pound and the consequent irreparable damage being done to British industry constitute an utter condemnation of the obsolete monetarist policies that she is pursuing? Is there any point along the road to disaster at which she will turn aside from those misguided policies?

The Prime Minister: With regard to the dumping of goods, we try to take action as quickly as possible through the European Commission. With regard to interest rates, the money supply figures permitted a slight reduction in interest rates, which was a move in the right direction. With


regard to the unemployment figures, I believe that it is generally accepted that the top priority must be to fight inflation. Only when that battle is won will there be a firm enough base on which to expand manufacturing industry. With regard to the hon. Gentleman's strictures on manufacturing industry, I must tell him that during the lifetime of the previous Government the output of manufacturing industry fell.

Mr. Cyril D. Townsend: Will my right hon. Friend confirm that the Government will remain steadfast to the communiqué issued in Venice on the Middle East, and will remain opposed to any attempt by Israel to alter unilaterally the status of Jerusalem?

The Prime Minister: That matter was dealt with in the communiqué issued from Venice. The communiqué is being put into effect by contacts being made with the many parties involved in the Middle East problem.

Mr. Jay: Does the Prime Minister feel that the Government's incentive Budget of a year ago has stimulated a great industrial revival?

The Prime Minister: There are many firms that are world beaters and doing extremely well, and I doubt whether they would be doing as well but for that incentive Budget. Many people who would otherwise have remained overseas have come home to start up new businesses.

Mr. Shersby: Does my right hon. Friend agree that a wage claim of 35 per cent. from the miners in the present economic circumstances is unrealistic? Does she further agree that the National Coal Board and the National Union of Mineworkers should receive every encouragement from hon. Members to reach a more moderate settlement?

The Prime Minister: This is the season of trade union conferences. Parliament gets accustomed to a number of high claims being made. It is not so much the claims as the settlements with which I am concerned, as is everyone who is concerned with the cost and price of coal this year and the price of electricity. What the miners decide will determine the price of electricity next year.

Mr. Barry Jones: asked the Prime Minister what are her official engagements for 8 July.

The Prime Minister: I refer the hon. Member to the reply which I gave a few moments ago.

Mr. Jones: Is the right hon. Lady yet able to say how she will find thousands of new jobs for redundant steel workers? Can she say what intervention she will make to save the tottering textile industry? Is she not experiencing just a tremor of panic as the British manufacturing base collapses because of her outrageous policies?

The Prime Minister: It is ridiculous to say that the British manufacturing base is collapsing. With regard to the problems of steel, the British taxpayer has poured about £5,000 million into the steel industry over the last five years. A number of closures have to be made, and Shotton was one of them. About £15 million was put into the Shotton area to try to mitigate the effects of some of the redundancies and to start new jobs.
With regard to textiles, I understand that the hon. Gentleman has an Adjournment debate tomorrow evening. There are successes a little further south of his constituency, where British Celanese is continuing with a £2 million investment.

Mr. Forman: In view of the fondness of the Opposition and certain sections of the press for the bad news all the time, will my right hon. Friend take time today to draw up a list of all those aspects of the economy in which there are signs of an improvement in productivity? Will she consider the possibility of a Queen's Award for increased productivity?

The Prime Minister: I have not considered a Queen's Award for improvement in productivity, but my hon. Friend is right. There are areas where there have been great improvements in productivity—

Mr. Concannon: The miners.

The Prime Minister: The miners, I agree, have made improvements in productivity. The average miner's wage at the coalface is £147 a week. They have made improvements in productivity. I am


sure that my hon. Friend the Member for Carshalton (Mr. Forman) will be delighted to receive confirmation from the Opposition Benches of what he said.

Mr. James Callaghan: When the right hon. Lady refers to closures in the steel industry that have to be made—I use her words—is she referring to the prospect of either Port Talbot or Llanwern steelworks being closed, because that is the greatest fear afflicting South Wales at present? If so, what would be the consequential impact on the coal mines of South Wales? Would we then be ready to close coal mines that are capable of producing coal in an efficient way because there is not the demand from the steel industry? If not, what is the Government's policy? How will the right hon. Lady protect the people of South Wales and elsewhere from the ravages of Government policy?

The Prime Minister: With regard to the proposed steel closures, the new chairman who has just gone into the British Steel Corporation is making a full and up-to-date assessment of the position of British Steel and will report to my right hon. Friend the Secretary of State when he has had time to make that assessment.
The situation with regard to the coal mines in South Wales is a matter for the National Coal Board. There are regular meetings, as the right hon. Gentleman knows better than I do, to discuss the future of coal mines in that area. It is still possible for coal to be landed in this country from Australia and the United States at a lower price per ton than it can be produced in some of our coal mines. That is sometimes a factor that puts up the price of steel.

Mr. Callaghan: Is the right hon. Lady aware—she must be—of the controversy over the subsidising of coal production in other countries compared with the subsidy here? Her Government propose to taper the subsidy on operating costs so that it is wiped out in two or three years' time. I ask her, in the interests of this country in 20 years' time, whether she is prepared to see coal mines closed, in the knowledge that the coal that could be produced will be for ever forgone and that succeeding generations will never be able to mine it?

The Prime Minister: The external finance limit of the National Coal Board

in the current year is about £834 million. That is a considerable subsidy by the British taxpayer to coal mines. There is also a substantial subsidy to steel. There are high subsidies to coal in other countries. The trouble is that we provide subsidies for far too many industries—coal, steel, British Leyland, shipbuilding and, last year, electricity. It is one thing after another. The right hon. Gentleman must remember that some industries have to produce the subsidies that others receive.

Mr. Callaghan: Does the right hon. Lady realise that those subsidies were made at a time when growth in manufacturing and other industries of this country was increasing at the rate of 3 per cent., when inflation was below 10 per cent., and when we had a decent incomes policy? When will she abandon her present policy, so that we can get back to that situation again?

The Prime Minister: During the stewardship of the previous Labour Government average earnings increased by 113 per cent., retail prices by 106 per cent., and manufacturing output fell by 2 per cent.

Mr. Adley: asked the Prime Minister if she will list her official engagements for 8 July.

The Prime Minister: I refer my hon. Friend to the reply which I gave earlier.

Mr. Adley: Does my right hon. Friend envisage any circumstances in which there will need to be an early amendment of the Act of Settlement 1701?

The Prime Minister: The Act of Settlement remains in force and the Government have no plans to change it.

Mr. Joel Barnett: Will the Prime Minister say whether her recent statements mean that she now has an incomes policy for the public sector, and free collective bargaining for the private sector?

The Prime Minister: I have what most employers have had ever since employers began—a policy for the pay that one pays to one's employees.

Mr. Onslow: Against the background of the welcome rejection of the recommendations of the Boyle report, will my right hon. Friend find time to comment today on the statement of the president


of the Nottinghamshire miners that the Government are out to create an unequal society, so why should the miners not get what they can?

The Prime Minister: I should think that many miners are pleased with the pay that they are earning, which is £147 a week for coalface workers. I think that that is evidenced by the fact that, according to reports, there is now a queue of young people wanting to become miners.

Dr. Edmund Marshall: To return to the Act of Settlement and the current speculation about whom the Prince of Wales may or may not marry, is not the most important consideration the fact that he should be able to lead his own life and find his own way to happiness, like everyone else?

The Prime Minister: I have already replied that the Act of Settlement remains in force and that the Government have no plans to change it. There is nothing that I can usefully add.

IRAN (AMERICAN HOSTAGES)

Mr. Latham: asked the Prime Minister what progress is being made by the Western Allies in bringing about the release of the American hostages in Iran.

The Prime Minister: The political and economic measures taken by the Nine and other Western countries are designed to show the Iranian authorities that there are real penalties for continuing to hold the hostages. We intend to keep up the, pressure.

Mr. Latham: Is my right hon. Friend aware that we have now reached day 248 of the illegal seizure of these diplomats? There seems to be some danger that the world is beginning to forget about them. Is it not time for a new effort to be made, either by the West or by the United Nations, to send a Third World or Islamic deputation to Iran to try to bring the matter to a speedy end?

The Prime Minister: We are all aware of the length of time that the American hostages have been held in Iran. There are signs that the sanctions to which I referred are having some effect. At least, President Bani-Sadr indicated that in an interview with one of the news agencies. We keep in close touch with our American friends and stand willing to help in any diplomatic initiative that they might wish us to undertake.

Mr. Dalyell: Will the Prime Minister search her memory and tell the House when she first heard of the American military expedition to the Iranian desert? Was, it like the rest of us, from the BBC at 7.20 on the morning of Friday 25 April?

The Prime Minister: I have already replied to that question a number of times. We were informed of the possibility of such an attack. We would never expect to be informed of the precise nature of such an attack.

NORTHERN IRELAND

Ordered,
That the matter of the proposal to establish an Enterprise Zone in Belfast, being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Committee for their consideration.—[Mr. St. John-Stevas.]

STATUTORY INSTRUMENTS, &c.

Mr. Speaker: With the leave of the House I shall put together the two Questions on the motions relating to statutory instruments.

Ordered,
That the draft Eurocontrol (Immunities and Privileges) (Amendment) Order 1980 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft International Organisations (Immunities and Privileges) Miscellaneous Provisions Order 1980 be referred to a Standing Committee on Statuory Instruments, &amp;c.—[Mr. St. John-Stevas.]

COMPANIES FLEXIBLE SHARE CAPITAL

Mr. Richard Page: I beg to move,
That leave be given to bring in a Bill to allow companies greater flexibility in the terms on which they may raise share capital; to amend the law with regard to the powers of companies to issue, redeem and deal generally with their share capital; to set out the special duties and responsibilities of directors, officers and certain other persons in relation thereto; and for connected purposes.
The Bill will, in essence, give a company the right within certain controls and restrictions to buy in its own shares. The primary purpose is directed towards giving close companies the flexibility in operation of their share capital that they already have over their loan capital. Perhaps even more importantly, it will give to such companies a spread of operation similar to that which is currently enjoyed by our public companies operating through the Stock Exchange.
The House is aware of the Green Paper introduced last week after I had decided to introduce my Bill. My initial reaction was to withdraw my Bill. However, I was persuaded to continue, because the Green Paper does not lay enough emphasis on the need for a parallel requirement of change within the Revenue to match the suggested alterations to the 1948 and 1980 Companies Acts. I believe that brought-in or Treasury shares should be held for redistribution at a later date and not cancelled. This is a further opportunity to draw the attention of the House to the importance of the changes and what they will mean to small businesses.
I should be delighted if the Government were to take up my Bill. If they did that, I should be extremely flexible when discussing amendments. However, I assume that that is unlikely.
It is necessary to examine the background that makes the Bill necessary. In reality, Britain has a small withered and undernourished small business sector. The popular misconception, possibly harking back to the times of Napoleon, is that we are a nation of small businesses—a country of shopkeepers. In reality, we are not. Britain is a nation of large industries, huge commercial enterprises

and a fat and expanded public sector. Between them the smaller business sector is increasingly squeezed.
When a country's progress and economy remains stagnant, as they have in Britain for the last six years—we have just heard how industrial production fell by 2 per cent. under the previous Government—it is inevitable that comparisons between ourselves and other more successful nations are drawn. If one does that in relation to our small business sector, several facts become glaringly obvious. Our small business sector, as a percentage of economic activity, is much smaller. It receives far less Government support, although we welcome the package in the Budget. The sector carries on its back a greater percentage of public officials per head of population.
Our small business sector is about 40 per cent. smaller than Germany's. The American Small Business Agency actively intervenes in Government legislation in favour of small businesses. If one excludes the Armed Forces, Britain has, in proportion to its population, 68 per cent. more public officials than France.
The purpose of the Bill is to encourage investors to support local enterprise. It draws attention to the need to establish and promote small businesses so that they can make an increased contribution to our gross national product and create employment. In the past investors have been reluctant to take up equity in small businesses because of the difficulty of realising their investment later. The reasons for that locked-in position could be many, but it arises usually because of the difficulty or inability of other shareholders to accumulate enough capital to buy out an investment at a price that approximates to the value of the holding.
However, even if the facility is not used—and I believe that it will be—there are many other advantages in allowing the buying in of shares. First, it can provide a way for the estate of a deceased shareholder in a company to find a buyer. Secondly, it can facilitate the retention of family control. Thirdly, it can enable a company to buy out a dissatisfied shareholder who is not pleased with the company's progress and release him from a locked-in position. Fourthly, it can be


especially important in relation to employee share ownership schemes, so that an employee can sell his shares if he wishes to leave the company. Fifthly, it will make it easier for close companies to raise the necessary cash and equity capital when it needs it most at the start or for expansion.
The Bill will remove the present locked-in position of the shareholder in close companies to allow people to invest, to take a risk if necessary, and to back their judgment in a local firm, knowing that they can recover their money from a small equity stake. People will be given a choice in addition to the more conventional forms of investment in the Stock Exchange, pension funds or insurance companies.
It is right to ensure that a Bill cannot be used for fraudulent intent. That can be achieved by requiring that the redemption of shares by a company can take place only after due notice to the Registrar of Companies and that officials handling the transactions are put under the same notice of care as is required when preparing a prospectus under the Companies Act 1948.
The Bill will have a wider range of operation, but I stresss its importance to close companies. I am doubtful how much use public companies will make

of the permission, especially with the tight safeguards to stop trafficking in shares.
The Bill does not seek to do anything unusual or revolutionary. Its provisions are not new. They are common practice in the United States and some EEC countries. However, the Bill will give small businesses the investment prospects to help them grow, and help them to provide their rightful share of our gross national product.

Question put and agreed to.

Bill ordered to be brought in by Mr. Richard Page, Mr. John Loveridge, Mr. Michael Grylls, Mr. Kenneth Baker, Mr. Michael Shersby and Mr. Graham Bright.

COMPANIES FLEXIBLE SHARE CAPITAL

Mr. Richard Page accordingly presented a Bill to allow companies greater flexibility in the terms on which they may raise share capital; to amend the law with regard to the powers of companies to issue, redeem and deal generally with their share capital; to set out the special duties and responsibilities of directors, officers and certain other persons in relation thereto; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 24 October and to be printed. [Bill 244.]

Orders of the Day — LOCAL GOVERNMENT, PLANNING AND LAND (No. 2) BILL

As amended (in the Standing Committee), further considered.

Clause 37

GENERAL POWER TO REDUCE RATE SUPPORT GRANT

Mr. Roy Hattersley: I beg to move amendment No. 79, in page 31, line 33 at end insert
'and if that authority has been informed that such a reduction will be made, and of the size of that reduction, by 1st July in the relevant financial year'.
The Report stage of the Bill now begins a consideration of the financial provisions, which have been as controversial as anything proposed by the Government. They have been received with universal criticism from local government associations—including those controlled both by Conservative and by Labour Parties—and they have not had a good word from any newspaper.
Some hon. Members therefore may find it slightly surprising that the Secretary of State, the "onlie true begetter" of these proposals, is not in his place to justify and defend them. That is the case, and we must rely on the capable interpretation of the wishes of the Secretary of State that we heard for so many sittings in Committee, but the Secretary of State will understand that some of the things that need to be said about these proposals are said about him. They are his proposals, and they relate as much to his character and psychology as to the proper organisation of local government. That he is not in his place to hear what will be said is to my surprise and not my fault. It is his fault, and his fault alone.
The first of the amendments that I move is, obviously, modest and patently reasonable. All it asks is that local authorities that are to be punished by the Secretary of State should be told about their punishment before 1 July of the year in which the punishment is to be exacted. Having spent many hours with him, I

know that at some time during his reply the Minister of State will tell the House that even under the present rate support grant system the eventual work-out of distribution of funds—the resources element and needs element being taken into account—takes three distributions over a period perhaps as long as three years.
I believe that on reflection even the right hon. Gentleman will understand that there is a basic difference between the system that provides that one receives money according to a formula that may require adjustment from time to time, and that that formula may require three tranches of payment, and the system that we now debate—the so-called transitional arrangements. In the first instance those arrangements provide a formula for the distribution of grant but then provide that the Secretary of State of the day may, arbitrarily and without any real indication how the conclusion is to be reached, pick on a few authorities and punish them for what the Secretary of State regards as overspending.
By any legal definition of the term it will not be overspending, since those local authorities will have done what they are entitled to do in law. But by changing the law the Secretary of State proposes to punish a few authorities of his choice. There is no comparison between that and the present rate support grant system. In the view of the Opposition there is no possible justification for councils being told after July that they will receive the peculiar, specific, arbitrary and uncircumscribed punishment that the Secretary of State will be enabled to enact under the Bill.
It seems to us no more than common justice, and, indeed, essential for the prudent management of local authority affairs, that a council that is to be fined in November should at least be told about it during July. That is all that we ask in the amendment. If, as we suspect—for I do not delude myself about the reasonableness of the Secretary of State—this amendment is rejected by the Government and all those Hampdens and Pyms on the Government Benches who will gladly vote for whatever their Whips say they should vote for, there is only one real conclusion to be drawn from such a rejection. That is the growing suspicion that the Government still have no idea how their block


grant and transitional arrangements will be worked out in practice.
They are still groping, trying to find a formula to enable the declarations of the Secretary of State to be applied in the real world, and as they grope, trying to save him from the folly into which his unthought-out declarations got him in the earlier part of the year, they are prepared to pick on any system, no matter how damaging to local authorities and no matter how much against the interests of local autonomy it may be, so long as it enables the Secretary of State to say that he promised he would punish local authorities and that, at last, he has devised a scheme of punishment.

Mr. Nigel Spearing: Will my right hon. Friend remind the House, for the benefit of those hon. Members here who were not on the Committee, that when he speaks of punishing local authorities the authorities will not be punished but the citizens of those local authorities who have authorised them to undertake and provide services—which the Secretary of State arbitrarily says shall not be provided—will be punished? Perhaps my right hon. Friend will spell that out for the benefit of Conservative Members who will receive letters from their constituents in due course.

Mr. Hattersley: I was about to go through—not in detail but I hope with some clarity—the way in which the block grant system and, initially on this amendment, the transitional arrangements will work, not least for the reasons given by my hon. Friend the Member for Newham, South (Mr. Spearing). People outside the House would not believe it if the situation were described only by implication. Those Conservative Members whom I suspect will vote for this measure should be clear about what they will vote for. Clause 37 provides:
The Secretary of State may reduce the amount of rate support grant payable to a local authority … if the uniform rate for that authority's area in that year exceeds the notional uniform rate.
What that means in plain language is simple and, I believe, wholly unacceptable to people who believe in local autonomy. It means that the Secretary of State of the day is able to stipulate a notional figure for rates that might he raised or

are raised or are thought likely to be raised throughout the breadth and length of England and Wales, and that any authority which raises a rate higher than the figure laid down by the Secretary of State is liable to penalties and can discover in November that moneys which it legitimately expected to receive under the rate support grant are withheld.
I wish to emphasise what I mean by "legitimately expected to receive". There is no doubt that a majority of councils, all over the country, which are raising rates in excess of what the Secretary of State thinks to be right, do so wholly legally. In Great Britain today a council and councillors must, as a duty, make their own judgment about the services which are necessary for their areas and about the rates necessary to finance those services. All over the country councils have made their right, proper and legal judgment about the rates that they should raise. Yet a few of them will be punished for acting legally in April it this law is passed on to the statute book by November.
I can only echo the words of the Spectator, a magazine not universally in support of my party and not universally complimentary to me. It said, in effect, that if this is not a retrospective act of legislation it is difficult to imagine how retrospection can be properly defined. People are being punished in November for what their councillors did legally in April. That in itself is bad enough. But the other point to which the amendment specifically refers is that at this moment those councils that are candidates for punishment have no way of knowing that it is their bad fortune to have been selected by the Secretary of State.
I raised the question with the Secretary of State at Question Time last week. I asked him when he would tell those councils who would have their legitimate grant withheld because they did not conform to his wishes, when that grant would be withheld, how much would be withheld and, for that matter, that they were candidates for grant being withheld. The Secretary of State said:
I do not believe that there can be any doubt in the minds of many authorities as to what the figures are all about.
He also said:
We have sent to every local authority a precise figure showing exactly what we believe


their levels of expenditure should be"—[Official Report, 2 July 1980; Vol. 987, c. 1519.]
The Secretary of State could have had two half-ideas in his mind when he gave that answer, both of which would have been wrong. I propose to deal with each in turn. The Bill provides that any council that levies a rate in excess of the notional uniform rate is liable for penalties.
In his circular to local authorities on 21 December the Secretary of State announced that the notional uniform rate was 119p. That was the hypothetical figure of rate levy in excess of which any council would be liable to punishment. But it is hardly likely that when the Secretary of State answered my question he meant that every council that was raising a rate in excess of 119p would be punished. It is hardly likely for two reasons. The first is that in his circular he told local authorities that he proposed to penalise only 10 or 20, and we were comforted when the Minister for Local Government and Environmental Services, who has never attempted to deceive us, confirmed that in Committee on 18 March. Therefore, we take the Secretary of State's word absolutely. If he is to punish only 10 or 20 he cannot expect every local authority that has exceeded the notional uniform rate to anticipate punishment, because on the latest information 241 authorities out of 456 are paying above the odds.
The Minister for Local Government and Environmental Services, who is nothing if not predictable, said that it had always been like that. In a moment he will probably tell me that he would expect it—half above and half below. If that is the case it is even more intolerable that the Secretary of State has the power to punish any one of the 50 per cent. of authorities that go above the notional uniform rate. At last, the Minister has grasped the nature of our complaint. The Bill allows the Secretary of State to pick and choose the authorities that he is prepared to penalise. It does not seem to me to be remotely unreasonable that he should make his choice before 1 July.
In fact, there are 42 authorities where the notional uniform rate is more than 150p. Therefore, even if the Minister chooses only those that are excessively

above his arbitrary and meaningless figure, he must still somehow pick 50 per cent. of them, and the other 50 per cent. will go free.
The second thing that the Minister's inaccurate answer of last week could have meant is that he proposes to penalise authorities that have not accepted the judgments of his various circulars and cut down their spending by 2 per cent. in real terms compared with the outturn for 1978–79.
The first thing that must be said about that is a matter of principle, which is that the Secretary of State must learn—if he does not learn quickly, 150 Labour authorities will teach him—that the letters and circulars that he sends out do not have the force of law. They are an expression of his judgment and wishes. In a free society, his judgment and wishes are no more important than those of anyone else. If a local authority chooses to ignore his judgment and wishes it is perfectly entitled to do so. It is wholly intolerable that he should now be passing a law to penalise local authorities that did not accept his wishes and judgment in April. That is exactly what he is expecting the House to do.
If the right hon. Gentleman is to penalise only 20 authorities at most, he will have the most difficult job choosing which of those non-complying authorities he proposes to take to task. At least 200 authorities have refused, found themselves unable, or described themselves as "unwilling" to make the reductions in their expenditure that the Secretary of State demands. That is why he had to send out a second circular, part pleading, part threatening, on 13 June saying "You are not making the cuts that I want. I expect you to do so." Somehow, the Secretary of State will have to choose which of 200 authorities—perhaps 250—should obtain the special punishments that he has in mind.
What the right hon. Gentleman owes the House this afternoon, and what I am sure he owes many local authorities, is a clear description of the way in which he will choose those that he decides are suitable cases for punishment. The Minister has already said that there must be some discretion.
…it is inevitable


said the Minister, in winding up the Second Reading debate,
that a number of authorities will exceed the notional uniform rate, but we have made clear that only those authorities which are substantially in excess"—
and hon. Members cried
By how much?"—[Official Report, 16 January 1980; Vol. 976, c. 1777.]
Well, answer came there none. We have not had an answer since that question was asked.
If local authorities that are in excess of the 119p figure stipulated by the Secretary of State are those that are likely to be punished, he has a duty to tell them how little in excess they must be in order to escape punishment, or at which point of excess spending they will receive his wrath. In a free society it is intolerable that they should be allowed to dangle in this way, not knowing whether grant is to be withdrawn, withheld or abandoned. It is intolerable not least because unless the right hon. Gentleman tells us which are the candidates for penal sanctions, when they will be notified of his choice, and—much more important—how his choice is to be determined, we shall again be driven back to the conclusion that he does not yet know and that he will cobble together some arbitrary scheme that meets his political requirements rather than the requirements of prudent spending.
Let me try to explain what I mean, and let me help the right hon. Gentleman give us the answer by offering some alternatives. He could, of course, penalise the 20 authorities with the largest increase in rates, or the 20 authorities with the highest rate levels, or the 20 authorities with the biggest increase in expenditure. He could choose any one of those things, but in choosing any one he would not be choosing the others, because the 20 authorities with the biggest rate increases are not the 20 authorities with the biggest rates, or the 20 authorities with the biggest increase in rate spending. Therefore, it is intolerable that he should have the arbitrary power to decide how to penalise these councils and to pick them out and pick them off one by one without notifying them until the last minute that he intends to do so.

Mr. Arthur Lewis: I do not quite follow my right hon. Friend's argument. Perhaps he can help

me. He knows that I represent part of the London borough of Newham. Unfortunately, that area has always suffered. I shall not go into the details, but recently there has been trouble about tower blocks. Whether or not it wants to, the authority has to move people out of those places. It must pull them down and rehouse those people. Is my right hon. Friend telling me that if the authority must pay by putting up the rates, because the Government so far have done nothing on Ronan Point, the Secretary of State can penalise the local ratepayers? Is he saying that we shall be penalised because the authority must move people out of tower blocks for safety reasons?

Mr. Hattersley: I am telling my hon. Friend exactly that. One of the major complaints, which was dealt with at some length in Committee, was that authority after authority had high levels of spending which, first, they could not avoid and, secondly, were imposed upon them by the Government. For example, the Government urged inner city authorities to spend more on the inner cities, on partnership schemes, and on decaying central areas.
The great example is Newcastle, with its underground transport system, which it can hardly abandon half-way through. By conforming to the Government's wishes it may discover that it is having money taken away from it because it is spending money on projects that the Government forced upon it. My hon. Friend has put the position exactly.
Another example of the absurdity into which the Government have got themselves can be demonstrated by comparing council with council—candidates for punishment—and their various spending and rate-raising records. I take my first example from London. If the punishment is to be exacted on the highest rates charged, Camden is a prime target—perhaps the prime target—with a rate of 266p, based on the notional uniform rate. My hon. Friends will be aware that Camden is a Labour authority. Under that classification of punishment, Hammersmith—a Conservative authority—escapes, because there the notional uniform rate is only 116·4p.
On the other hand, if councils are to be punished according to their most recent rate increases, the Tory authority of Hammersmith put up its rates by


26·5 per cent. Camden raised its rates by only 25·3 per cent. On that criterion, Hammersmith is more worthy of punishment than Camden. I use the word "intolerable" for the seventh time. It is intolerable that, under the Bill, the Secretary of State can say "We are after Camden. We shall judge it on the gross rate levy, and thus enable Hammersmith to escape in a way that it could not escape if we judged it on percentage rate increases." I hope that the Secretary of State will spend some time justifying a system that gives that power to the Secretary of State, with its peculiar political proclivities.

4 pm

Mr. John Home Robertson: My right hon. Friend referred to absurdities. Will he comment on the fact that only yesterday, when giving evidence to the Select Committee on Scottish Affairs, the Secretary of State for Scotland said that he did not propose to seek the punitive powers being sought by the Secretary of State for the Environment in this clause?

Mr. Hattersley: We pursued that matter in Committee and came to the only possible conclusion—which will reverberate round local authorities when the Secretary of State fails to answer any questions tonight—that the reason why this is happpening in England and not in Scotland is that the Secretary of State for the Environment was foolish enough to make promises about punishing councils, without thinking about them. The Secretary of State for Scotland was not so foolish. The past six months have been spent inventing a way in which the promises made by the Secretary of State can be fulfilled.
I shall give another example about the absurdity—

The Minister for Local Government and Environmental Services (Mr. Tom King): On a point of order, Mr. Speaker. Are hon. Members allowed to raise on the Floor of the House matters from a Select Committee before that Select Committee has reported?

Mr. Speaker: That Select Committee sat in public. If a Select Committee sits in public, nobody can reveal any secrets.

Mr. Hattersley: The Minister's mad desire to follow the truth, wherever it

may lead, is demonstrated again this afternoon. We had a great example of that in Committee. I hope that by the time he replies to the debate he will change the habits of a lifetime and say something about what is going on in ministerial minds.
There has been a great deal of talk about Wolverhampton, the council that raised its rates by the largest amount this year. It is also the council where the Labour Party increased its membership by four seats. Wolverhampton raised its rates by 44·2 per cent. I am sure that it will be argued in Conservative clubs in the South of England that Wolverhampton, above all other councils, should be punished for that increase. But 100 councils in Britain—a quarter of them Conservative—are charging a higher rate than Wolverhampton. The Secretary of State has to make the invidious decision whether he punishes the councils that raise their rates by the largest amount, or the councils whose rates are at the highest levels. He must tell us how he will make the distinction between those two choices.
If it was a simple matter of those absurd choices being made by harassed officials in the Department of Environment, the scheme would be laughable. But because it allows the Secretary of State to construct virtually whatever rules he wants for punishing whichever councils he wants, and allows him to do that retrospectively after the legal decision to raise their rates and decide their spending has been taken, it is something that no democratic House of Commons should allow, not least because of the behaviour of the Secretary of State.

Mr. Eldon Griffiths: (Bury St. Edmonds): Nonsense.

Mr. Stan Crowther: rose—

Mr. Hattersley: I shall give way to my hon. Friend the Member for Rotherham (Mr. Crowther) in a moment. I wish to deal first with the hon. Member for Bury St. Edmunds (Mr. Griffiths) who said "Nonsense". After that, I shall gladly give way to my hon. Friend so that we can move from the ridiculous to the nearly sublime. I was about to refer to something that happened earlier, when the hon. Member for Bury St. Ed-


munds may not have been in his place.
The Secretary of State was pressed on Second Reading to tell us the criteria against which he would judge a council as being worthy or not worthy of punishment. I read not the version which appeared in Hansard originally but the version as corrected after the Secretary of State agreed that words he had used had been omitted from the original text. The revised version is that he will judge whether they are punishable and worthy of punishment "in the light of the expenditure intentions and the decisions of individual local authorities and the speeches made by members of those authorities". The hon. Member for Bury St. Edmunds might like to say whether he thinks that councils should have their spending and Government grants determined by the speeches made by individual local councils. Is that the way that money should be distributed in a free society?

Mr. Eldon Griffiths: The right hon. Gentleman is generous in giving way on this point. The word "punishment" is inappropriate to the Government's intention, which is to protect the taxpayers' money. I should have thought that the right hon. Gentleman also felt some responsibility in that respect. In his responsibility to have regard to the protection of public money, my right hon. Friend the Secretary of State must form his judgment on a variety of factors, including the public pronouncement of elected officials in an area.

Mr. Hattersley: The House will make its judgment about the libertarian principles of the hon. Gentleman in making speeches. I shall give him some advice about money. The rate support grant accommodates about £9·6 billion. The transitional arrangements will influence the distribution of £2 million to £3 million out of £9·6 billion. The idea that that will encourage councils to be more prudent and to spend less, as I hope to demonstrate in a moment, is a dream world. The idea that the Secretary of State can stop local authority spending is imaginary. If the threat had had any effect, the Secretary of State would not have had to send out a second letter on 13 June. He failed to stop councils from spending money that they intended to spend and, in most cases, needed to spend.

Mr. Crowther: Before my right hon. Friend leaves the question of the uncertainties arising from the clause, he may wish to comment on the discrepancies in valuation, about which the Government are refusing to take any action by putting off the revaluation. That has resulted in some authorities levying rate poundages which appear to be high, but which are producing a low level of income from the rates because of the serious discrepancy between one authority and another in the valuation of property.

Mr. Hattersley: That matter will be dealt with in a subsequent amendment; I must not deal with it at any length now. Conservative Members may discover to their surprise—although not to the surprise of them all—that, because of the problems to which my hon. Friend referred, some councils will be penalised when they are spending very little, but have the misfortune to be high-rated authorities. The incompetence of the Government has included them within the formula. How many local authorities controlled by the Conservative Party are scrimping for every penny, and may well be penalised?
The rateable value makes an enormous impact on the amount that authorities are able to raise. Yet, under the Bill, the Government are proposing to make changes in revaluation which, once more, allow the Secretary of State the widest discretion to decide on the timing of revaluation, or to order a partial revaluation—

The Secretary of State for the Environment (Mr. Michael Heseltine): The Labour Government put them off every time.

Mr. Hattersley: The Secretary of State cannot say a word in the House or elsewhere without revealing some extra facet of his character. The simple difference is that the previous Labour Government thought it right to include a provision which required us to come to the House for its approval. The Secretary of State does not need that approval any more. He will put it off without a word. He is able to order a revaluation in one area but not in another, or a revaluation of commercial property but not of domestic property. It is intolerable that he alone should hold that power.
I return to the question of the operation of the transitional arrangements. Why are the Government introducing transitional arrangements which threaten a number of councils between now and the introduction of block grants? The Minister gave two reasons for that. The first was the one that the hon. Member for Bury St. Edmunds suggested to the House, namely, that this would have the effect of preventing profligate councils spending more than they ought to spend.
My first comment is that in this society today it is legal for local authorities, for their councils, to make their own judgments about what their own areas need. If they can carry their local electorate, that is all they are required to do. To change the law retrospectively to punish them for that is intolerable.
My second comment is that the scheme is not working. The Minister of State said in Committee that the transitional arrangement would help to achieve a lower level of clawback this year. What he meant was that by threatening a few he would frighten a lot. But he has not done that. I regard it as deeply disreputable to have a vague threat hovering over the heads of 200 councils, with only 20 to be punished but with the other 180 so afraid that they do things that in their judgment are against the interests of their area. Disreputable as it may be, there is no argument about the fact that it is a failure.
This is demonstrated by the speeches that the Secretary of State keeps making and the letters he keeps sending out saying that councils have not cut their spending. The transitional arrangements have not worked. I gave the figures from memory. I have since discovered, to my relief, that I got them right. The distribution of the rate support grant this year will be about £9·6 billion, and the transitional arrangement will not save the public purse a penny, because the grant will only be distributed a little differently. The only difference it will make will be to the marginal £1 million or £2 million on that £9·6 billion. Both in terms of the level of public expenditure and the distribution of public expenditure, the effect of the transitional arrangements is not so much negligible as non-existent.
That leads me to the second reason that we were given for the introduction of the transitional arrangement. It was that profligate authorities were receiving too much of the grant and prudent authorities were receiving too little. In Committee we were told poignant stories about the prudent knights of Avon having to pay £1 million to the profligate burghers of Bristol. The Government were determined that in the future these great men in the shires—who would not spend a penny unless forced to do so—should not be penalised for their attitudes towards public spending and public services.
The hard fact, squeezed out of the Minister after two days of debate, is that the redistribution—the clawback as it is called, the second division of the rate support grant—will still apply, even with transitional arrangements. The rich knights of Avon will still have to provide their £1 million for the poor burghers of Bristol. In terms of redistribution of the grant, it makes no difference at all. The idea of equity may be there in theory, but in practice no difference will be made. A few marginal pounds will be moved from one authority to another, but nobody will know the difference.
I am left with one final task, which is to offer my own idea why this proposal—arbitrary, unreasonable, retrospective and unworkable—is being pushed through the House of Commons. I repeat what I said earlier. At a moment of typical rashness during one Question Time, the Secretary of State announced that he intended to punish overspending authorities. "Do you intend to punish them?", I asked. "That is exactly what I intend to do," said the Secretary of State. Ever since that moment, he has been trying to find a way in which he can fulfil that promise.
The promise will be deeply damaging to local democracy. It will be an affront to all those people who object to and resent retrospective legislation, but it will save the Secretary of State's face. Having suffered from this bad attack of ministerial machismo, he is now trying to justify it. I am sure that the right hon. Gentleman will try to justify it in his typically brazen fashion.

Mr. Eldon Griffiths: The best feature of the extraordinary speech that we have just heard from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was his alliteration—the "ministerial machismo" and so on. I do not know whether the right hon. Gentleman, during his period of office, ever had responsibility at the Department of the Environment. Perhaps he will advise me whether he did. Apparently not. He has not, therefore, the misfortune to belong to that small band of Members who have had to grapple with the peculiarly difficult and frequently unjust business of rate support grant allocation. I know of no other formula under any Government which can be said to have thrown up such great inequity among the various authorities. I am sure that right hon. and hon. Members on each side of the House who have had to tackle the problem will agree with me there.
I cannot say with any certainty that the solution or formula that my right hon. Friends have devised will necessarily work equitably. I cannot even say with certainty that their solutions will be any better than the mish-mash that they replace. But I am certain that if the right hon. Member for Sparkbrook had had the experience of trying to protect the taxpayers' money, for which he was responsible to this House, he would not have made the speech that he made. What he has failed to recognise is that there is a problem, namely, that local government—which has to provide services which this House requires of it, and services that our people as a whole rightly expect to be provided—is one of the main engines of inflation in this country.
In saying that, I am not making attacks on any particular authorities. I simply know that an engine which is generating the public expenditure that local authorities generate must play its part in the general containment of inflation. No Secretary of State grappling with that problem, on whichever side of the House he sat, could do other than seek ways and means either to persuade people to take a certain course of action—I am sure that I can carry the right hon. Gentleman in that direction—or, if persuasion failed, none the less seek to protect the public interest. That, in my view, is the whole

motivation behind what my right hon. Friend is seeking here to do.
As I said at the beginning, I cannot say that I believe that this solution is necessarily the best, the only or the right one. But I believe that it moves us forward in one important respect, namely, that it introduces a measure—dare I use the word?—of discrimination as between those authorities which can be seen to be using public expenditure in a prudent way and those which are not.
I have been a local government Minister and I accept at once that the whole heart of local government must be a measure of local democracy, where elected members, responsible to their own ratepayers, make their own decisions. Of course, I accept that. But it must also be understood that when elected members make those decisions, because of our previous grant system, including the new block grant system, they hypothecate the expenditure of very large sums of the money for which this House is responsible.
We have a Secretary of State and a Minister for Local Government and Environmental Services who are responsible to this House precisely because this House requires that they should be the guardians and the stewards of the national funds which are hypothecated by local authorities when they take decisions in the democratic way that the right hon. Gentleman has suggested. He failed in his speech to recognise that the decisions of local government in the aggregate—free and democratic as they may be in each case—none the less impose an aggregate demand on resources, on credit and on finance in this country from which no Government, particularly in present circumstances, can possibly turn away their face.
I did not sit through the Committee proceedings, but I have had some experience in local government and in rate support grant negotiations—which are difficult. I believe that the Bill has introduced for the first time the principle that a Secretary of State responsible to this House will be able to act selectively, with discrimination, but will have to justify himself here to hon. Members. That is the democratic accountability for what he is


doing. I believe that in present circumstances it would be madness for any Government to turn their face away from their responsibility to the general taxpayer, to the general revenues of the country and to the general need to control inflation. That is the answer to the right hon. Member for Sparkbrook.

Mr. Arthur Lewis: I wish to be personal because I wish to put a personal point. All hon. Members know that the hon. Member for Bury St. Edmunds (Mr. Griffiths) represents the Police Federation. We all know that the police received what some of my constituents would call a fabulous increase in their salaries, although the hon. Gentleman may think that that increase was reasonable. My constituents have elected a local authority that will have a precept from the Tory-controlled GLC to pay the salaries of policemen. If because of that the local authority has to raise the rates over the notional £1·19 or £1·20, it could be penalised—

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. Is the hon. Gentleman making an intervention, or is he making a speech? I did not call him to make a speech.

Mr. Lewis: I am making an intervention. I am asking the hon. Member for Bury St. Edmunds whether he is aware that that cannot be fair to my constituents.

Mr. Griffiths: In fact, I had sat down, but just as I did not wish the House to be disappointed by no hon. Member rising to respond to the right hon. Member for Sparkbrook, I would not wish to disappoint the hon. Member for Newham, North-West (Mr. Lewis) by not accepting that he made an intervention. Subject to confirmation by the Minister, the short answer to his question is that, in so far as the police precept which would fall to be paid by the hon. Gentleman's local authority required an increase in the rates, because it had no choice in the matter, it would fall to be taken fully into account by the Secretary of State in his assessment of the rate support grant. I should be surprised if that were not the case.

Mr. B. J. Woolmer: On this occasion, I address my

remarks to the amendment relating to the transitional arrangements. The remarks of the hon. Member for Bury St. Edmunds (Mr. Griffiths) appeared to relate to all the clauses on the rate support grant. If he feels that the Bill concerns the wish to improve the fairness, equity and reasonableness of our rating system, he badly misjudges the circumstances and nature of the Bill. It does not improve the overall control of the local government in public expenditure. It falls badly short of those measures.
There is a strong element of retrospective legislation in this clause. It picks upon a few councils halfway through the year for decisions that were taken last spring, when those councils could not have known which would be affected, by how much, and on what grounds. That is an unreasonable way for the House to proceed. I suggest that when local authorities considered the amount of the rate, it would have been unreasonable for them to have known whether they would be affected, on what grounds they would be judged, and what the effect on them would be. Even now, we do not know the criteria that will be applied during the transitional arrangement that is proposed.

Mr. Eldon Griffiths: I am sure that the hon. Gentleman is not suggesting that any local authority when fixing the rate could have been under any illusions about the Government's call, and the national need, to contain expenditure as much as possible. Many did not, and they said so.

Mr. Woolmer: My right hon. Friend the Member for Birmingham, Spark-brook (Mr. Hattersley) has already pointed out that it is possible for a local authority to control expenditure with virtually no rate increase, and still come out as one of the highest rating authorities in the country, and yet still be penalised. That would be extremely unreasonable. At present, we do not not know whether that will apply to them, and this is simply an illustration. It is possible that, no matter what an authority did in the spring, it could not have avoided being caught out later in the year. That is one of the reasons why the Bill appears to be opening up an arbitrary and unreasonable power to the Secretary of State.
If the Secretary of State really wished local authorities in aggregate to restrain expenditure in the national interest, the record over the last few years has been incredibly good. By comparison with central Government, and with the uncertainties of the private sector's demands upon the banking system, the record of the local authorities within margins of 1, 2 or 3 per cent. has been good. Both in the transitional arrangements and in the Bill as a whole, the Secretary of State appears to be trying to find a way of screwing down local authorities in aggregate to a fine degree of expenditure, and to a degree that no other major sector in the economy could possibly be kept to. He is doing that by attempting to frighten a lot, by picking on a few. That is not likely to result in the aggregate behaviour that the Government want.
The problems of some authorities in achieving this unknown target, based on unknown criteria, which could result in unknown penalties, are manifold. For example, over the last few years many authorities—particularly the partnership authorities, but also many of the old industrial areas—have been positively exhorted by successive central Governments to spend more in the interests of overcoming serious problems. It has often been said by central Government that, unless local authorities help themselves, central Government will not help them. Central Government have said that unless local authorities are prepared to pay for the local rate, they should not expect central Government to subsidise part of their effort. In Yorkshire we understand the principle of self-help. Yorkshire was prepared to pay its part of the improvements that were necessary. But the paradox of the transitional arrangement is that the penalty for self-help in the last two years is likely to be money taken away this year. The spending this year is, in substantial part, the consequence of spending programmes which were started in the last financial year and are going on this year.
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I put this forward as one of the reasons why many authorities genuinely feel not simply a sense of grievance but of bewilderment. I do not know how ratepayers are to understand a succession of public pronouncements and exhortations

for areas to start helping themselves in industry, to clear up dereliction in the environment, to spend more on improving educational prospects and technical training for children and to get rid of bad housing and then to be picked off because their rate is increasing by a certain percentage this year or they have finished up as high spending authorities. That is why I suggest that this attempt to achieve no more than a 1 per cent., 2 per cent. or 3 per cent. overall change in all local authorities seems like taking a sledgehammer to crack a nut.
I suspect that if the Secretary of State had said to local authorities, as my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) did when he was in that office, "In the national interest, despite all your problems, will you try to get down another 1 per cent. or 2 per cent?", there would have been greater co-operation and understanding with the flexibility that certain authorities which could not avoid particular spending decisions, would be able to carry out those spending decisions.

Mr. Donald Thompson: Does the hon. Gentleman agree that, had that appeal been made, it would have been met but that certain authorities—those which have taken no notice year after year—would again take no notice?

Mr. Woolmer: Many hon. Members have equal or greater local government experience than I, but my experience is that local authorities bring considerable pressure to bear on each other to try to conform with national priorities. At the same time they ultimately respect the judgment of individual councils which say that for very good reasons they should nevertheless spend a certain amount of money and levy a particular rate.
In West Yorkshire there is a tremendous derelict land problem. I suggest that many local councils in the South of England would well understand the decision of an authority in West Yorkshire, faced with spoil heaps and derelict land, to spend money to do something about them. Some of those authorities face the prospect of the 100 per cent. derelict land grants being taken away from them. Therefore, they may need to increase their spending to get rid of an increasing spoil problem resulting from the fact that we are now producing


one tonne of waste for every tonne of coal taken out of the ground. There will be as much spoil in the next 20 years as we have had in the last 100 years. These are the kind of problems with which no rule book can deal. No Secretary of State can at the end of the day explain why one authority or the other should have a fixed, inflexible rule.
I am not the only one who says that. The Conservative leader of the AMA prior to May made the same point to the Minister for Local Government and Environmental Services. He asked whether the right hon. Gentleman accepted that it was ironical that partnership authorities singled out as having particularly serious problems should be so at risk from the Government's grant proposals. This was a Conservative, not a Labour, leader. It was not someone who did not agree with the Government's policies making that point. Local authorities cannot suddenly switch off the spending consequences of recent investment decisions for priorities which until today had been agreed.
I cannot agree with the alternative of penalities relating to percentage increases. The implication is that an authority which has been a low spender in the past with poor services cannot, if there is a change of political control, make good those poor services. I suggest that it would be intolerable for a local authority, not for the first year but for successive years, to be ossified into adopting a proportionate position in providing services as a result of this Bill. If a local authority has poor services and there has been local reaction to them, surely we should not set up a system which provides that that local authority shall not merely be penalised but should face savage penalties for attempting to improve its poor services. Is it reasonable to say to school children "If your local authority is the lowest in the table in spending on books, it will be penalised if it tries to go up the league"? I suggest that would be nonsense. Yet we have no guidance in the Bill to enable us to believe that that will not be done.
One of my authorities in Kirklees is in very much that position. The Conservative council said that it believed that ratepayers would prefer low rates and poor services, but last May it lost to a

Labour council on a programme that people wanted better services. Are we to say to that Labour council "Despite your being elected to improve services, if you do so you will be penalised"? There is no easy answer. But from my experience in local government, the answer is not to have rigidly laid down formulae which mean that local authorities cannot respond. That will ultimately lead to conflict between local government and central Government of a kind that we have not experienced. I believe that such a conflict would not be in the best interests of this country.
It is not that I do not want local government control of spending. When I was on the policy committee of the AMA and chairman of one of the AMA's major authorities, I always took the view that the ratepayers' money was as good as mine. I thought of it as coming out of my pocket. I did not spend money as if it did not matter. I would ask myself "If it were my money, would I spend it? Is it fair to take even a penny out of a man's or a woman's pocket for this expenditure?" It is not a case of taking money out of rich people's pockets. Council leaders and council finance committees consider an item of expenditure and ask themselves "Is it reasonable to take another 10p a week from people bringing home only £30, £40 or £50 a week?" That is the attitude adopted by councils. They are not spendthrifts. They do not throw money around. They consider whether people in the locality can afford it.
I am possibly preaching to the converted in this Chamber. But local leaders and chairmen are like everyone else. They meet people in the street and are asked "Why have you put up the rate? It is costing me another £1 a week." They have to justify the expenditure not in the House once or twice a year, but virtually every time they go into the street. It is an injustice to suggest that local authorities are not acutely aware of the ratepayers' or the national interest. I suggest this is the wrong way to go about it.

Mr. Eldon Griffiths: The hon. Gentleman is making an interesting and valuable speech. I take the point that local councillors are conscious of the ratepayers' pressures upon them and that they do not for the most part spend


money like water. But does the hon. Gentleman accept that local councillors are a little less provident with money that they can hypothecate from far-off anonymous Government sources which in the past have been automatically payable because of the grants systems? The hon. Gentleman wants more local responsibility. Is not that achieved by getting away from the grants system, which meant that they were spending the taxpayers' as well as the ratepayers' money, and moving towards the block grant system which means that they can show more responsibility in the use of their own locally allocated funds?

Mr. Woolmer: The hon. Member raises matters which are probably more appropriate to the debate on the block grant clauses. I shall address my remarks to him on that occasion, if he is in the Chamber. However, I suspect that he will agree that I have been on my feet for too long already. I shall return to the subject.

Mr. Deputy Speaker: Order. I was about to rise when the hon. Gentleman rose to reply to the intervention of the hon. Member for Bury St. Edmunds (Mr. Griffiths). We must keep to the amendment under discussion. The hon. Gentleman is going rather wide of it. Perhaps he will now address himself to the amendment.

Mr. Woolmer: The problem in this attempt at transitional arrangements is that the Government are trying to tie local authorities down to a degree of inflexibility in a year when they face widely divergent reasons as to why their situation is what it is. That is a very strong objection to the way in which the Government appear to be proceeding, particularly as the local authorities have the very good record to which I have referred.
The truth is that the intention behind the clause, and the other clauses to which we shall come in due course, is not an improvement in the method and the distribution of control of local rate support grant. That is not the purpose. Local authorities see the Bill as the product of the Tories' deep suspicion of local goveranment, especially in industrial areas and the big cities. That is what is at the heart of the Bill—a deep and ideological dislike of public services. As my right

hon. Friend the Member for Sparkbrook has said, it was an attempt to show the local authorities that they could be put in their place. I suggest that these transitional arrangements will do a great deal of damage. They will do no good to the reputation of central Government, and they will do a lot of damage to the local authorities which most desperately need improved public services.

Mr. Allan Roberts: I shall attempt to keep to the amendment, Mr. Deputy Speaker, and not to speak about the proposals for introducing a block grant system, to which reference has been made by the hon. Member for Bury St. Edmunds (Mr. Griffiths).
The proposal to claw back from local authorities this year rate support grant which they have already received, and on which they have based their present rating assessments, and the block grant proposals, are based on the Government's assumption that public expenditure is a bad thing, that, in the words of the White Paper, Cmnd. 7746:
Public expenditure is at the heart of Britain's present economic difficulties
and that there is a need, therefore, to control public expenditure. The Government are choosing local government as their scapegoat and are trying to control local authority expenditure even more than central Government expenditure, central Government having increased expenditure on such matters as defence and law and order.
Local government will be penalised by these retrospective clawback provisions. The White Paper claims that local government expenditure and public expenditure are out of control. The introduction to the main document, Cmnd. 7841, repeats the theme, and in table 1.2 shows how large a proportion of the gross national product is taken up by public expenditure. The figures are: 41½ per cent. in 1973–74, 46½ per cent. in 1974–75 and in 1975–76, and then 45 per cent., 41 per cent., 42½ per cent. and 42 per cent. in the following four years. From the figures, it looks as though such expenditure is coming down—but never mind; that is what the Government believe.
It was at this point, when all doubts seemed to have been resolved—public expenditure is out of control, it is at the


heart of our economic problems, and, therefore, local government ought to be penalised if it spends more than the Government wish—that The Guardian of 28 March 1980 saw fit to point out that in Britain the share of the national income devoted to public expenditure is lower than that in any other EEC country. In 1979 we spent 42.8 per cent. in this way. West Germany and France spent 46.4 per cent. Holland spent 58.3 per cent. Yet all these economies have regularly out-performed ours.
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I do not believe that in order to solve the country's economic problems we need to cut local government expenditure or to penalise local authorities in the way that the penal clauses in this legislation will penalise them. I believe the opposite. I believe that the country's economic success and economic future is dependent upon increased public expenditure and on increased activity on the part of local government.
The area which I represent, Bootle, is on Merseyside. In my constituency and in the areas surrounding it, the only economic activity taking place is activity which is a direct result of public expenditure, either of central Government or local government. The two main employers of labour in my constituency are the local authority and the National Girobank, and without increased public expenditure on Merseyside through local government and so on, Merseyside will continue to decline, as it has over the last 20 years under successive Governments with monetarist, pseudo monetarist and interventionist policies. We have never managed to get proper private investment and private capital on Merseyside. We have been dependent mainly upon local government initiatives.

Mr. David Alton: In perhaps the largest of the local authorities in Merseyside, in Liverpool, a Labour administration recently allowed the rates to rise by 50 per cent. That was doing an equal disservice to the local economy, because it has forced many small firms out of business.

Mr. Roberts: I am grateful for the hon. Gentleman's intervention. He represents a party which, together with Conservatives on Merseyside, is now cut-

ting back on local authority expenditure, making hundreds of people redundant, increasing unemployment in the Merseyside area and cutting services, in a way which demonstrates adequately that the Labour council was justified in increasing rates to the level needed to provide the services that are required in that city. The Labour council was dealing with an inherited situation of a virtually bankrupt city as a result of Liberal and Tory actions previously in spending reserves and in under-rating, and as a result of RSG cuts imposed by central Government.

Mr. Alton: How many people have so far been made redundant in local government in Liverpool?

Mr. Roberts: The hon. Gentleman again proves my point. The resistance of the Labour movement in the direct labour department and on the council in fighting the cuts that are being made by the Liberal/Tory council has so far prevented the redundancies taking place. But they are still on the programme and are still being proposed. They are likely to happen if the Liberals and Conservatives in Liverpool have their way.

Mr. Arthur Lewis: Is it being denied that it is better to keep people employed doing something useful than pay taxpayers' money to people on the dole who are doing nothing?

Mr. Roberts: That is exactly what the Liberal/Tory philosophy in Liverpool seems to be. I am grateful to my hon. Friend. Ordinary citizens of Merseyside will not tolerate a situation in which a council is making building workers redundant from a direct works department when there are thousands of people on housing waiting lists, when there is a need to build houses and when houses need repairs. The electors will decide on these matters in future local elections.
In proposing these penal clauses, the Government are not penalising Labour councils or councillors. No Clay Cross situation is being created in which, if Labour councillors vote to increase the rates more than the Government wish, they will be penalised or surcharged. These clauses are aimed directly at penalising the electors, voters and citizens of


the areas in which Labour councils are in control. What Labour councillors have done, as my hon. Friend the Member for Batley and Morley (Mr. Woolmer) has described, is to take account of the level of services required and to balance that with rate increases which they think the citizens of their area can afford. They have assessed that a certain level of services needs to be provided for the elderly, for children, for the disabled and others, and they have levied a rate accordingly.
The Government will tell them that the rate is too high and that they will claw back some of the rate support grant. The Labour council will be forced to decide whether to cut the services below the level necessary—which will hit the elderly, the handicapped and the disabled—or to increase the rates to compensate for the money clawed back. The Government will probably penalise authorities again. They will probably claw back more of the rate support grant.
Ultimately, a local authority may be faced with such great clawbacks that it is unable to pay its staff. Local authority employees, and those in greatest need of local authority services, will suffer the most. We should get away from the idea perpetrated by the Government that spendthrift Labour councils will be penalised. The elderly, the handicapped, the disabled and schoolchildren will suffer from the clawback. Labour councils will not suffer if they act in the best interests of their electorates, which democratically voted for them.
Have the Government considered what may happen when the Labour Party comes to power? I hope that that time is not too far distant. The powers that the Secretary of State for the Environment wishes to take will be on the statute book by the time that my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) has become Secretary of State for the Environment. I shall urge my right hon. Friend to use those powers as ruthlessly as the Secretary of State for the Environment will use them in the interests of the Conservative Party.
I should like the next Labour Secretary of State to threaten the Conservative-controlled Sefton council, and to use the powers in the opposite way. I should like

him to say that Sefton council will be penalised unless it levies sufficient rates to provide decent services, and unless it gives a reasonable rate fund contribution to the housing revenue account in order to provide the necessary housing. A Labour Secretary of State would say that, if the council did not provide essential services, it would not get the money for fairy lights in Southport.

Mr. Robin Squire: I have listened with great interest to the hon. Gentleman. However, I am sure that he is talking about the wrong amendment. We are discussing the transitional provisions.

Mr. Deputy Speaker: That is for me to judge. I am listening very carefully.

Mr. Roberts: I hope that the next Labour Secretary of State will tell Sefton council that, if it does not provide funds for housing, education and the social services, it will not get the money necessary for fairy lights in Lord Street, Southport, or funds for statues of Red Rum and bandstands. I hope that a Labour Secretary of State will study the powers and use them to the benefit of local government and to the benefit of those in greatest need. The Secretary of State does not know the powers that he is giving to the next Labour Government.
Conservative councillors, Labour councillors and officers who serve local government, know that the Government are penalising local government in an unnecessary and undemocratic way. The Government's proposals will destroy the foundation of local government. The essence of local elections is being destroyed by the Government's Draconian measures. The kick-back will come not only from Labour-controlled local government but from Conservative-controlled local government. When the Secretary of State implements the clawback provisions in an unsatisfactory way, the reaction will reverberate along the Back Benches of the House of Commons and throughout the Conservative Party conference in Brighton.

Mr. Anthony Beaumont-Dark: One thing is clear. The whole of part VI is unsatisfactory. One does not have to echo the argument of the hon. Member for Bootle


(Mr. Roberts) on that. Any sensible person would have been scared to death when the hon. Gentleman suggested that local authorities should be able to spend, spend, spend. That is nonsense. Both central and local government have continually spent money. Local authorities have not been more inclined to spend money than central Government. One could argue that local authorities are more responsible if one compares the amounts spent by central Government against those spent by local authorities in the past 10 years.
There has always been a conflict between the ones who give and the ones who spend. Local government expenditure involves £15 billion. One must bear in mind that 70 or 80 per cent. of that expenditure is foisted on local government by Whitehall. We cannot blame local authorities for the misfortunes that have been foisted on them by Parliament. The block grant proposals represent a great stumbling block. However, this provision also involves the problem of retrospective legislation.
It is nonsense to have a notional rate of 119p. That will mean one thing to those who come from Huddersfield or Birmingham, and another to those who come from Bournemouth or Torquay. It is nonsense to suggest that the problems of the elderly in Bournemouth are the same as those of the elderly in Huddersfield or Birmingham. They cannot be the same. That is why the Government are so wrong. They are well aware that it is with great pain that I say that I shall not support the proposals. I have no intention of allowing my 24 years' experience in local government to be tarnished by such proposals.

Mr. Russell Kerr: Sock it to 'em, Darkie.

Mr. Beaumont-Dark: With such help, I do not need to encourage enemies.
The proposals are wrong. Would the Association of Metropolitan Authorities, the London Boroughs Association, the Association of County Councils or the Association of District Councils—most of which are Conservative-led—have flown to Socialist Members for support if they had been given a proper hearing? Of course not. The transitional arrangements are part of a wretched package. We shall

reap a bitter harvest, and we shall not get the co-operation that we desperately need between the great spenders of Whitehall and of town halls.
It is not too late. The Government should reconsider the transitional arrangements. Block grant is probably one of the worst things that I have seen for many a long year. One does not have to be a great expert on local government, nor does one have to be as involved as many hon. Members have been, to recognise that one cannot have a notional rate. Treasurers and chairmen of finance committees cannot arrange their figures only to find that some Minister has spoken with weary officials and has announced that one authority will get "X" and another "Y".
There is no such thing as a notional rate in local government. There is no such thing as an average authority. There is no such thing as a uniform man, woman or child, or uniform authorities with the same problems. One of the things that I have found, having spent 20 years in local government, is how often people misunderstand what local government is all about. It is about the democratic right of people to make their mistakes. In God's truth, this place has made enough mistakes in its time under one Government or another. Also, we should remember that many of the problems faced by local authorities are not of their own making; they have been foisted upon them.
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I hope that the Government realise that councillors are as much elected to serve their people as we are. It is wrong to try to dictate a system of payment, because it will not be and has not been accepted or understood. Of course, it is just as irresponsible for local authorities to spend as if there is no tomorrow because there will not be an economic tomorrow if all the authorities go on in the way that a few have done. Of course, they have to be brought under sensible control.
But anyone who has dealt with Ministers, as I have as chairman of finance in the city of Birmingham and the West Midlands county, knows full well that there are ways of controlling local authorities without using a great big hammer to crack very few nuts. I hope


that the Government will recognise that we can either be in partnership with local government or we can operate a dictatorship over it. It is no part of my philosophy or of my reason for coming here to see the Government set themselves up as a great dictatorship because of temporary problems.
Inflation has come as a great shock and a great rolling cloud over all those who plan local government expenditure year after year. For 20 years I have lived under some kind of inflation. I helped to plan the city of Birmingham's expenditure based on a 5 per cent., 6 per cent., or at worst 8 per cent. rate of inflation. Then, because of one misfortune or another—oil or Government mismanagement—local government has been overwhelmed by inflation that no one could have hoped, at a stroke, to do anything about.
I hope that there will be a sense of mercy and understanding of the problems of those people who are doing the job. This is not the time to war with local authorities; it is the time to talk to them. It is a time to achieve a real sense of understanding. This clause on transitional arrangements and other clauses to come will damage the fabric of local government for many years. We are foisting the mistakes that this House has made in the past on to the local authorities. Certainly there is no way in which I can go in the Lobby in support of this or the other clauses of part VI. The time has come to think again and do something positive. The time has come for us to say what we want the local authorities to do instead of foisting one great law after another on them. When they spend the money and get the people to do the tasks, we then tell them that they should not have done it. That hypocrisy must end. It damages; it does not build. I am in this place in order to build, and that is why I cannot support this clause or the clauses to follow.

Mr. Alfred Dubs: I congratulate the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) on having defended local government on the basis of his years of experience in it. I notice that the Secretary of State has been in hiding for most of the afternoon. He disappeared earlier like a scalded cat when he did not want to

respond to the criticisms made by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), and I am sure that he is even more pleased now to escape the wrath of the hon. Member for Selly Oak. However, I hope that we shall have some response to these criticisms because the questions that have been asked this afternoon deserve an answer.
I represent a constituency within the London borough of Wandsworth. The Conservative Party captured that local authority in May 1978. Judging by the many speeches from Conservative Front Bench spokesmen when the previous Government were in office, and from Ministers in this Government, Wandsworth is the jewel in the crown of the Tory Administration. Ministers have gone to Wandsworth and told that authority how wonderful it is because it is cutting local services. They have patted the leader of the council on the head and then rushed back to London. In Wandsworth the council appears to have been doing what Ministers have asked—cutting services with a savagery and ruthlessness that has been unequalled by most local authorities. Whatever the services, Wandsworth council has cut them. That is true of housing, social services, law centres and transport for the disabled.
Yet what do we find after all these cuts have taken place? Wandsworth council is still, according to the Secretary of State's yardstick, spending too much money. Wandsworth council's rate is still well above the notional uniform rate. Some of us would have thought that Wandsworth would be exempt from the punishment that will be meted out to local authorities. Perhaps that is why the Secretary of State has been so imprecise in stating how he will punish local authorities that levy rates above that set by him as the notional uniform rate. If there is any fairness in the way in which the Secretary of State applies his punishments, Wandsworth council, despite all its ruthless efforts to cut expenditure, should be clobbered with the rest of them. But of course we know that that will not be the case. Wandsworth will not get that sort of punishment. We know that that punishment will be reserved for other London boroughs, such as Lambeth, with which Wandsworth is frequently compared.
Having seen the effect of these cuts, we all know the consequences. We know also that these transitional arrangements can only make things worse. They will either make local authorities cut services further or they will add to the conflict between local government and central Government. These transitional arrangements will increase the sense of unfairness felt by local government, which is why every local authority association has protested to the Government about the nature of these arrangements. They will add to the uncertainty with which local government must face its difficult financial tasks in the year ahead. One of the things that local authorities have complained about for years is the uncertainty caused by Whitehall.
The Secretary of State and his team are making matters worse. They will compound this by giving local authorities no warning at all of whether they will be punished. It is difficult enough for local government to make plans several years ahead in terms of prudent financial management. But to have to make savage cuts in expenditure, if they are to be punished at the last moment in the financial year, is asking too much of local authorities. Such an attitude seems to be based on a lack of understanding of how local authorities operate and the difficulties with which they are faced in meeting the edicts from the Secretary of State and his colleagues.

Mr. King: How much warning did local authorities get under the existing system on clawback which was operated by the Labour Government when they were in office?

Mr. Dubs: It is certainly true that local authorities have had a legitimate complaint when they have been faced with cuts under both Governments. When faced with cuts or clawback they have not had the time that they might have had. These new proposals will make things worse. Local authorities will have even less time and they will have to make their plans in such a hurry that those plans can hardly be based on prudent financial expenditure.
I am sure that everyone wants to see increased efficiency in local government. No one will pretend that local government is as efficient as it could be. But

the difficulty is that in order to make local authorities spend their money wisely and in order to increase their efficiency, one must give them years of planning to improve the efficient delivery of their services. The more that local authorities have to make last-minute cuts and respond to last-minute pressures, the less they will be able to concentrate on the efficient delivery of their services, and they will increasingly have to consider what services they can cut to comply with the latest edict or punishment.
The problems of inner city areas are numerous. They have been reiterated many times. If those problems are to be overcome, local authorities, whose main concern they are, need the money and resources, and they need to be certain that they will get them. The Government's proposals for the transitional arrangements will have the most damaging effect on local government and inner city areas. I hope that even at this late hour they will reconsider them.

Mr. Arthur Lewis: I, too, pay tribute to the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). This debate is about a local government matter, and is not a party issue. However, it will become a serious party issue if the Government do not listen to their Back Benchers, who are greatly interested in local government.
We all remember what happened at Clay Cross. The Government cannot make people do good, bad or indifferent things if those people believe that it is wrong and the Government are being unfair and unkind. Whatever laws are passed and whatever proposals are put forward—"In Place of Strife" or whatever else—they all mean nothing without co-operation. [Interruption.] The right hon. and learned Member for Hexham (Mr. Rippon) may laugh, but I remember when the five dockers were put in prison and we had to dig out the Official Solicitor from somewhere to get them out.
I give the Government a warning. In most areas that suffer the worst deprivations there are powerful Left-wingers, Trotskyists or revolutionaries, as Conservative Members will call them. These areas have immense problems with unemployment, housing, immigration, schooling and so on. I could go on all night. Incident after incident occurs,


and the local authority has to spend money to avoid near revolution. I shall not go into the merits or otherwise, but let us consider the actions of this Government. Rightly or wrongly, they drastically enforced a huge increase in gas and electricity charges. Those charges went up, and they are going up again. An overwhelming number of old age pensioners live in my constituency. We have more blind, deaf, dumb and disabled people in the constituency than elsewhere in London. It is a good local authority with good social services, and people have been attracted to the area. Many of these people cannot pay their already high electricity bills, and their electricity is being cut off.
An immigrant lady with three little nippers came to my surgery last week. Her electricity had been cut off—

Mr. Deputy Speaker: Order. I am extremely sorry to interrupt the hon. Gentleman, but will he relate his remarks to the amendment before us?

Mr. Lewis: I was trying to show that, if the Government go ahead with their proposals and do not accept the amendment, they will have serious difficulties in enforcing the cuts. Even without such cuts, people are experiencing difficulties, and the proposals will multiply them.
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This immigrant lady had no electric lighting. She had to use candles in jam jars. That is very dangerous with kiddies running around. We have tower blocks in my constituency. There was an explosion at Ronan Point, for which we still have not had the money. Gas supplies had to be taken away from such tower blocks, and electricity used instead, which costs a great deal of money. Electricity charges are now rising, and the council will have to help people meet their expenses. Those are all additional costs that the local authority feels it should legitimately meet. I cannot decide whether those costs are legitimate or not. The elected council has to decide. If the council wastes money, overspends or unnecessarily increases charges, I assume that its electorate will eventually vote it out of office.
If the Minister is not careful, he will create great social unrest in such areas. People will not live in rat holes with-

out gas or electricity, or stay in bed without heat. Whatever Government are in power, they will not put up with that. The troublemakers will cash in on the unrest. They are not concerned whether their actions are legal. Other people, too, will be willing to go to prison. My local authority has some councillors who would be prepared to go to prison rather than take such action. I do not want to see that happen, but the Minister may create that situation.
Local authorities are normally able to discuss such matters with the Government and reach agreement. I ask the Minister not to go ahead with the transitional arrangements until he reaches agreement with the local authorities. He should also discuss the matter with his hon. Friend the Member for Selly Oak and others like him. Although something needs to be done, it should be done by consensus. The proposals should not be forced on local authorities. Even if the Government get their way, implementing such proposals will be dangerous.

Mr. Derek Foster: The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) spoke with great passion and feeling from his experience. I hope that the Government will listen to him. My experience in local government is not nearly as long as his 24 years, but I had the somewhat unusual experience of being both a senior officer and a member of a local authority. If the fact that there is a great deal of unease throughout local government, both at officer and member level, about the present arrangements has not communicated itself to the Government, I cannot imagine what more can be said or done to get the message across.
People are talking about a fundamental change in the relationship between central and local government being established in the next 25 years. I appreciate that we are discussing clauses that relate to the temporary arrangements and that this matter might be more appropriately raised on the rate support grant clauses, but there are fears in the minds of every local government councillor and officer. Indeed, many officers are more fearful than are members, because they see themselves becoming mere agents of central Government and they entered the service with a different expectation and belief.
I was pleased to hear what the hon. Member for Selly Oak said, because I have heard many Conservative Members and some of my hon. Friends making speeches that suggest that they have no understanding of the problems of local government or the commitment and time given by members and officers. Members often have no hope or expectation of reward and officers often work long hours without extra pay because they feel themselves part of a service to the public.
Members and officers of local authorities have felt punch drunk for many months because they have been criticised on all sides as though they were the naughty boys in present circumstances. As the hon. Member for Selly Oak said, many of local government's functions have been imposed by Governments who have created expectations in the country that things could be achieved. But they can be achieved only through the spending of money, and councillors and officers have welcomed the chance to respond to the legislation imposed by the House because they believe that their job is to ensure progress in their boroughs and counties.
My county of Durham has not been chosen as a partnership area, for justifiable reasons, but there are areas of deprivation in the county that are just as bad as some of those in inner cities. We are all conscious that we can get to grips with those problems only by spending public money.
I wish that Conservative Members would not talk about public expenditure as though it is a sin against the Holy Ghost. Of course, it is possible to spend more than we can afford and of course local government expenditure must be brought under some sort of control, as must central Government expenditure. However, local government has a respectable reputation for keeping its expenditure within 1 per cent. of its target. That has been done over a long period and central Government cannot compete with such a record. It is with the greatest resentment that local government councillors and officers listen to suggestions that local government expenditure has been out of control over the past decade. Such suggestions bear no relation to the facts.
There is a feeling that the Government are proposing a set of arrangements to penalise a few overspending authorities. Overspending is a value judgment, because authorities have been democratically elected on the basis of a programme of serving the needs of their communities. If they feel that their actions are right, who is the Minister to say that those are the wrong things to do? The local electorate will decide on that at the next election.
It is wrong for the Government to take to themselves dictatorial powers to penalise a few authorities. I shall be glad to join the hon. Member for Selly Oak in the Lobby.

Mr. Ted Leadbitter: I was surprised to learn from the explanatory memorandum to the Bill that the Government seek
To relax controls over local government".
The Bill is anything but a relaxation of controls. The Minister must recognise that every body of opinion expressed to him and his Department, including speeches in the House and debates on another Bill in Committee, have shown that local government is anxious to have the freedom to make its own decisions and to be responsible to its communities.
Some previous speakers have considerable experience of local government. They have confirmed that local government is responsive to electorates. My theme is that we should give local government freedom. It has exercised the freedom that we have given it over the years with prudence. When difficulties have arisen electorates have changed the composition of their councils. There is no freedom in this Bill. There is only restriction.
As we are considering public expenditure, this is a good opportunity to put forward another theme that is relevant to the economy and the impact of the rate support grant. If we go too far in cutting public expenditure so that we build fewer schools, hospitals and houses and roads, the immediate consequence will be increased unemployment in the construction industry. One of the pet themes of the Government is giving freedom to the private sector, but their actions will deprive private sector building industries of a substantial number of large contracts.
If the Government go too far, we will be on the roal to depression. It has been proved that when unemployment rises above 1 million the public sector borrowing requirement increases at a sharper rate than if public expenditure is increased and employment is provided by the construction of schools, houses and hospitals.
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No one is talking about building for building's sake. We need to build in accordance with the needs of our people, particularly our young people. One corollary of large-scale unemployment is that public purchasing power is taken away from local areas, and that affects retail industries. There could be a whole range of depressing influences on local economies which would add up to a national disaster. That theme might be worthy of examination in comparison with the policies of the Government, who believe, oddly enough, that the savage cutting of public expenditure will create a better economic climate.
If the ability of authorities to make judgments in the knowledge of the needs of their people and their areas is to be taken away through the Secretary of State having power to punish them by reducing the rate support grant, that would have another depressing effect. Protests would arrive from every local authority. Authorities will not know what reductions the Secretary of State might impose.
The Bill is not clear. It establishes that there will be a penalty if the uniform rate for any authority in any year exceeds the notional uniform rate. I have studied the words "notional uniform rate". The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) indicated that he did not understand how hon. Members could make judgments on the basis of what appeared in the Bill. Of course the Government seek to clarify notional uniform rate. However, it is not clear to those who have to implement the judgment on rate support requirements. The Bill says:
'notional uniform rate' means the rate which, having regard to payments of the needs element of rate support grant and the prescribed national standard rateable value per head of population
and so on.
Can anyone tell me how a chief executive or treasurer of a local authority can anticipate, assume, calculate or consider what will be the "notional uniform rate" in such a manner that he can advise his council that, if it does this or that, it may go beyond the margins? It will not know. Worse than that, I am sure that it will not know the standard rate. If one exceeds the other, we must seek to establish what is the uniform rate. The provision is very vague for those who have to implement it. According to the Bill, uniform rate
has the meaning assigned to it for the purposes of sub-paragraph (1) of paragraph 10 of Schedule 2 to the Local Government Act 1974 by sub-paragraph (3) of that paragraph".
How on earth can any finance committee make a judgment? I am prepared to sit down if the Minister can say how he would calculate it. He cannot, unless he gels a note from his advisers in the box.

Mr. King: Figures are made available to the finance committtee. The hon. Gentleman has read out the definition that describes the categories of expenditure to be covered in that way. When he asks how the finance committee gets the figures, I have to tell him that the figures are provided. Has he seen the rate support grant order every year?

Mr. Leadbitter: I was not only the leader of a Labour group on a council for some years, but I also have 16 years' local government experience, including chairmanship of a finance committee. Hon. Members with local government experience will confirm what the hon. Member for Selly Oak says. The great mistakes are not made at local government level; they are made here. It is arrogance on the part of any hon. Member to come to the House with a brief from the Treasury or any Department and to presume that, because it has the authority of Whitehall or the House of Commons, it is likely to be firmer, more correct and more likely to be acceptable than judgments made at local authority level.
Although local authorities can turn to the Bill to find the definitions, it is known to the Minister that when authorities make decisions for future expenditure, this is done in the form of estimates. They will, therefore, be punished, not on a warning about the future position, but because of


what they have done and are later told by the Government that they have gone over the margins. Local authorities are placed in an invidious situation. They cannot plan in a situation when they do not know precisely what are their commitments and obligations under this section of the Bill.
I plead with Ministers. A great deal of common sense has been applied to this problem in the House of Commons. The Ministers who are now present do not possess the power to change their minds. The Secretary of State is not here. The process of holding this debate is a matter of interest. There will be comment in the press tomorrow, but the fact is that the Ministers here lack the necessary power. I beseech them to appreciate that the Bill is not yet through the House, and the Secretary of State should heed the voice of the House of Commons and those hon. Members with experience of local government. They must recognise that if they want to carry out some changes in the Bill, they must relax the controls on local government. For God's sake, do it.

Mr. King: I was interested to hear the contribution of the hon. Member for Hartlepool (Mr. Leadbitter). The hon. Gentleman was not a member of the Committee. I can understand that he has not had the chance to bring himself completely up to date on some of the matters that were discussed. I do not complain. They are complex matters. The one thing that gave him away was his last attack in which he said that Ministers were sitting paralysed and unable to change their minds. He should talk to some of his hon. Friends who served on the Committee. One or two were kind enough to say that Ministers responded positively and, on a number of occasions, changed proposals in the Bill. We are not perhaps as paralysed as we might appear.

Mr. Leadbitter: I know that people change their minds. I am simply saying that the two Ministers now present are not in a position to change their minds today.

Mr. King: That is a fascinating observation. But these are the two hon. Members who did change their minds from time to time in Committee. We

have now listened to the arguments made on Report.
It is important to remember what this interesting debate has been about. We are discussing an amendment which says that this proposal shall not be implemented unless notification is given by 1 July to the councils concerned. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who made an extremely entertaining contribution. will forgive me if I say that I occasionally get a feeling of déjà vu and that we have been round the course before. His speech was a little schizophrenic. It seemed to oscillate between describing the Bill as the most outrageous attack on local government democracy that he could remember and as a pretty insignificant measure because of the minor variations that it would make to the distribution. The right hon. Gentleman quoted a figure of £9,600 million gross as being what he thought might be the impact of the clause in terms of the transitional arrangements. I cannot at this stage confirm or deny such a figure.
The right hon. Gentleman asked what would be the criteria and the guidance that I could give. The hon. Member for Hartlepool, who was working from the face of the Bill, experienced some difficulty over the transitional arrangements and how they might be implemented. This matter was covered in a circular issued to local government in December last year. It was set out originally in the consultative council with local government. A report was made to Parliament and a parliamentary answer given in November last year. These details were spelt out at the time. Having established initially that we would much prefer not to have to implement the transitional arrangements, the criteria made clear that if this was, however, necessary, they would be applied to authorities that were substantially in excess of the notional uniform rate. It was envisaged that they would apply to possibly 10 and certainly not more than 20 authorities. There would, in addition, be a power of waiver for those authorities that are already at such a high level of expenditure that they would see themselves inevitably within the danger area and feel that there was no way in which they could come within proximity to the notional uniform rate. Where it is clear that there has been


a significant attempt to moderate expenditure, or reduce the volume of expenditure, waiver will be applicable.
I had hoped that it would be possible to tell the House the full details of how the transitional arrangements will operate. However, that is not possible. Contrary to what the hon. Member for Batley and Morley (Mr. Woolmer) said about the traditional role of local government in managing to keep within the guidelines of the totality of local government expenditure, the returns show that expenditure by local government this year is budgeted at about 5·6 per cent. above that envisaged in the Government's expenditure plans. Therefore, we have had to ask for a revision of budgets, as the right hon. Member for Stepney and Poplar (Mr. Shore) did in a similar situation.
It would be wrong for us to anticipate that revision of budgets in determining how to apply the waiver. Some authorities could make revisions that will qualify them for consideration under the waiver. For that reason we shall not be able to let the House have details of the transitional arrangements before the end of September at the earliest. Local authorities are engaged on the revision of their budgets. It will take time to interpret their returns and that is a necessary precursor to determining the application of the transitional arrangements.
The right hon. Member for Sparkbrook and my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) referred to retrospection. The right hon. Gentleman has tried to find an element of retrospection in the arrangements. As I listened to him I remembered that I fought the previous Government on the Aircraft and Shipbuilding Industries Bill. The compensation provisions envisaged that the average stock market price for the companies to be confiscated, for the three years prior to the previous general election, would be the price which the shareholders and owners of such companies would receive. After that, to be lectured by the right hon. Gentleman on the nuances of retrospection is outrageous.
My hon. Friend the Member for Selly Oak suggested that there is retrospection in the changes that we might make to

the increase order. There is no question of our taking money away from the local authorities. Adjustments will be made to an increase order in November. We gave warning of it last November and it was confirmed in December in the House. It will be the subject of approval by Parliament in the main legislation. It will then be subject to further parliamentary approval. Amendment No. 84 specifically requires parliamentary approval for the principles and details of the transitional arrangements. Nothing can happen without parliamentary approval and that must precede any payments to local authorities. I do not know how that can be made out to be retrospection nor how it can be compared with the present situation and be found inferior.
At present clawback is imposed, not by the will of the House, but by civil servants working an arbitrary mathematical formula based on the resources element and the rating decisions of individual local authorities. Hon. Members have said that our proposal is an abrogation of democracy. The right hon. Member for Sparkbrook said that no democratic society should tolerate the proposal. His Government took much more Draconian action, and diverted more substantial resources than we are likely to divert, without any parliamentary approval or notification. The charge of retrospection is unacceptable. There is no retrospection. We are talking of a properly approved parliamentary decision.
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A number of hon. Members have suggested that local authorities are to be punished. It is suggested that the transitional arrangements propose to claw back money to help cut public expenditure. That does not arise. The Opposition Front Bench understand that but some hon. Members do not. None of the money will come back to Government. Under the provision Ministers act as trustees and arbitrators between the competing claims of local authorities, as they have traditionally done under the rate support grant scheme. My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) put the argument well. Nothing under the transition will reduce the amount of public money going by grant to local authorities. However, it will influence its distribution.
Parliament has sanctioned the existing clawback arrangements. When the resources element has been distributed and when authorities think that they know what they will receive, they are told, later in the year, that because the competing claims on the resources element have exceeded the finite sum it will be redistributed. The effect of that redistribution is to give more to authorities with the highest level of expenditure and to take away from authorities which are more prudent. That is what happens at present. I doubt whether a single hon. Member is prepared to defend that practice.
We shall not be able to go all the way. I apologise because our transitional arrangements are in some ways too modest. There will be clawback this year because the transitional arrangements cannot cover the extent to which the resources element has been exceeded in the rating proposals of local authorities. However, the clawback this year will be diminished to the extent that local authorities with expenditure levels which are so significantly in excess of needs will have a certain amount reduced. That amount will be distributed among the other authorities or will help to reduce the amount by which money would otherwise be taken away from every other authority in the land.

Mr. Hattersley: I thought that this might be the moment for the Minister to answer one or two questions. By how much will this adjustment to the £9·6 billion ensure that the redistribution will be beneficial as a result of the transitional arrangements?

Mr. King: I have answered that question. I have already told the right hon. Gentleman that he quoted a figure that I could neither confirm nor deny. I do not know whether he was listening then. I have answered the question and he will recall the phrase. It all depends on our receiving the revision of budgets. Until we know which authorities have been successful in achieving exemption under the waiver for those significantly in excess of the notional uniform rate it will not be possible to make that determination.
I was seeking to establish the particular role that Ministers have in the duty to distribute grant and in that context I

turn to the remarks of my hon. Friend the Member for Selly Oak. I know that he has many commitments in other directions but he may not have appreciated the point that there is a common misconception that our proposal in some way removes rating decisions from councillors. My hon. Friend used the phrase—I think I got it rightly—that the issue was about the democratic right to make mistakes. In the context of local government he used that phrase. It is the privilege of councillors. I accept that entirely.
However, in the matter of making mistakes with public money, it is a question of the distribution of that money on the fairest possible basis. That is something about which the House—not only Ministers—must be specially concerned. That is the challenging job. This is not a party political point. The right hon. Gentleman quoted the figure of £9·6 billion. That money must be split among 454 local authorities.
The problems of the present rating system as the resource base for local government were raised and these difficult issues must be tackled. But our proposal does not in any way seek to remove the democratic responsibilities of councillors to their electors to run their local councils. Our responsibility is for public money and for the distribution of the money that enables councillors to discharge that responsibility. It has always been the responsibility of Ministers, no matter how we dress it up. We may call it rate support grant, the block grant or anything we like, but it is a problem that Ministers must face.
I would like to make it abundantly clear to the House that the suggestion made by the right hon. Gentleman that councillors going about their legal business of fixing the rates and deciding the budget might suddenly find themselves in some way acting illegally is absolute nonsense. There is no question of them having acted illegally. Those are decisions that those councillors are entitled to take. What he is asking is whether the Government will decide, in the light of the expenditure decisions, the fairest way to distribute that grant. The proposal tackles that issue.
In speaking of the transitional arrangements, I hate to disappoint the hon.


Member for Bootle (Mr. Roberts), who seemed to have some passing knowledge of these matters. I found his contribution to the debate pretty depressing. I do not always agree with the hon. Member for Liverpool, Edge Hill (Mr. Alton) but I did agree entirely with his intervention. One cannot help wondering whether the lack of employment opportunities that might exist in his area has something to do with the sort of political comments made by the hon. Member for Bootle and his friends. It is no good the hon. Gentleman coming and pleading in the House for employment in his area and saying that employment can be achieved only through State support if his local authority policy, his colleagues in local government and his party supporters are, by their rating decisions, destroying the very seed corn of the businesses that might provide that employment.

Mr. Allan Roberts: Is the Minister of State supporting the actions of Liverpool council in proposing to make hundreds of men redundant and in running down the direct works department and other essential services?

Mr. King: I listened to the exchange that took place between the hon. Gentleman and the hon. Member for Edge Hill. If the hon. Gentleman wishes, I will tell him what I wrote down at the time. I wrote: "The worst sort of local Tammany Hall politics." If that is the sort of leadership that Bootle gets in the face of present problems in the country, it is not surprising that Bootle has those difficulties. The hon. Gentleman asked for it by his intervention and he has got it. The hon. Gentleman, in the face of problems, is fighting petty party politics and does not realise what are the serious issues at stake. He made exactly the same sort of debating society intervention to me as he made to the hon. Member for Edge Hill.
I will now tell the hon. Gentleman something about the Bill that we are supposed to be debating and the amendment to which he was, for most of the time, seeking to address himself. He made a point about the position of a Labour Secretary of State. I am sorry that he has not been able to read the Order Paper because I wish to give him a bit of information that might be helpful. He will find that these are transitional arrange-

ments and that they will not be available to a future Labour Secretary of State. That is because the arrangements are for one year and are to be repealed under an amendment. After that we move on to arrangements for block grant. That is the answer to his question.

Mr. Allan Roberts: rose—

Mr. King: No, I have given way enough. This amendment to which we are addressing ourselves seeks to delay, or wreck, the introduction of the transitional arrangements for this year. The proposals we have made are a genuine attempt to seek a fairer method of distribution for this year as we move towards the block grant. It is on that basis that I urge the House to reject the amendment.

Mr. Allan Roberts: On a point of order, Mr. Deputy Speaker. I would like to draw the attention of the House to the fact that I consider the Minister's state-men to be a personal attack on me. It was an attack on my activities as the Member representing Bootle. Because the Minister would not give way to enable me to answer that personal attack I raise this point of order in the hope that the Minister will withdraw his personal attack.

Mr. Deputy Speaker: The Minister has already sat down. However, I took his remarks to be a debating point rather than a personal attack.

Mr. Hattersley: If it is any consolation to my hon. Friend, if he reads the Committee record he will see that there were many references to what we all described as the Minister's technique. That technique was to patronise a few—as he did with his hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark)—and in the end to be offensive to someone upon whom he had picked for no other reason than that by that time he had run out of arguments on the main subject. I expect that that technique is known in Bootle, as it is in Sheffield, by the immortal phrase "If you cannot fight, wear a big hat." That is what the right hon. Gentleman constantly does. His reluctance and inability to fight is best demonstrated by the simple fact that we know no more now about which authorities will be punished, when they are to be punished, how they are to be


punished and by what amount they will be punished than we did when the debate began.
The one fact that the Minister brought himself to include in his speech was that there will be about 20 such authorities. I revealed that to the House having quoted a letter from the Minister. The only fact concerning punishment in the Minister's speech was that we have known about it since 21 December when it was notified in a circular sent to local authorities. The essential questions in this debate concern the number of authorities to be punished, what their punishment will be and when that punishment will be made known. The Minister has not attempted to answer.
I can feel little but sorrow for the right hon. Gentleman who has been left as the last boy on the burning deck to defend the indefensible. He heard from his own side only one speech of support. That was from the now absent hon. Member for Bury St. Edmunds (Mr. Griffiths), who revealed a total innocence of the contents of the Bill. I suspect that if the hon. Gentleman had understood the Bill he would have taken exactly the same position as the hon. Member for Selly Oak whose powerful speech was, I think, understood and welcomed on both sides of the House. The Minister is laughing now. I hope that he is laughing just as loudly when he reads the Division list this evening.
The speech by the hon. Member for Selly Oak evoked the comment that this was not a party issue and that the same views and attitudes had characterised speeches on both sides of the House. One thing that has emerged from the debate is that the division is largely between those hon. Members who have had local authority experience—who have served on local authorities, who understand their problems and who have faced their difficulties—and those who have not. Among those who have not are the Minister of State and particularly the Secretary of State for the Environment. Not only does the Secretary of State not understand or have any experience of the problems of local authorities, but he has a positive disdain of local authorities. He believes that they are little people who can be instructed by him to do what they ought to do according to his principles.

As I have said, as the years wear on, he will have to learn that that is not true.
6 pm
I devote the rest of my few remarks to only four points which were half raised by the Minister. The first concerns his oft-repeated assertion that there is no element of retrospection in the Bill. I do not know whether he believes that, but no one else believes it.

Mr. King: Prove it.

Mr. Hattersley: Well, let me try.
Councillors behave wholly legally in raising the rates of their choice. The Minister says that they will behave wholly legally in September. Nothing illegal will have happened, but, although their behaviour in April was legal, they will be punished for it in November. When they took that action in April, and when they said that the rates ought to go up to 140p, 160p or 210p, there was no legal power for the Secretary of State to punish them. He has assumed a legal power to punish them for something that they did before he possessed that legal power. I again use the phrase in the Spectator: if that is not retrospection, retrospection has no normal meaning, coinage or currency.
That is not the worst aspect of the right hon. Gentleman's failure to answer the debate. He asked why I described this simultaneously as trivial and a major affront to the constitution of principle. Let me assure him that it can be both things simultaneously and that it is both things simultaneously. It will have only the most minimal effect on the distribution of grants between one authority and another. It will have no effect at all on the overall levels of grant, which the hon. Member for Bury St. Edmunds could not bring himself to understand. It will have the most minimal effect in terms of overall Government policy.
However, in terms of the principle, and in terms of saying to an individual local authority "Thou shalt not do this, or if you do it you will be punished for it", that is a consequence which we at least regard as having the most enormous constitutional implications. It is the beginning—we find it again and again in the Bill in other clauses—of the Government telling local authorities what to do, and telling them in a specific, detailed


and arbitrary way. It is the arbitrary quality which leads me to my final point.
The Minister's speeches on this subject are always couched in value judgments. He talks about overspenders, but does not define what overspending is.

Mr. King: I am rather worried about the right hon. Gentleman because he has asked me to answer a question that I have already answered, and now he says that I did not give a definition of overspending. That is precisely what I did. I said that it was substantially in excess of what either the previous Government or the present Government, based on the needs assessment, have in the past calculated to be a reasonable level of expenditure. The right hon. Gentleman may not have been aware that the previous Government did that. He may have heard of the needs assessment, and I said that it would be substantially in excess of that.

Mr. Hattersley: If the right hon. Gentleman believes that that is a definition, it accounts for why he does not understand what retrospection means. It is just a problem of vocabulary rather than a problem of politics. I have twice asked him what "substantially" means. For example, if a person who is to go to prison for stealing a substantial amount of bread and potatoes asks the judge "How much is substantial?", and he says "Well, the best thing to do is to steal no bread and potatoes and then you are covered", it is a peculiar definition of a rule by which people are to be punished. It is determined by, and based on, the right hon. Gentleman's constant use of value judgments in describing all that he is talking about.
The right hon. Gentleman talks about more prudent local authorities, but more prudent by whose definition and by what standards? I fear—this is where the real affront in the Bill lies—that it is more

prudent by the Secretary of State's judgment. He decides whether one is prudent. If he does not think that one is prudent, one is in trouble. If he thinks that one is prudent, one may get away with it. That was confirmed by what the Minister, in his innocence, thought was one of the defences of the Bill.

The right hon. Gentleman said that there will be a waiver and that local authorities which made a genuine attempt to reduce the volume of their expenditure would be let off by the Secretary of State. I am sorry if the right hon. Gentleman resents the seriousness and strength of our attitude over this, but I believe that fundamentally it is a wrong principle to pass a Bill which allows so much discretion in the hands of the Secretary of State. The idea that "I will penalise whichever local authorities I choose, but, do not worry, I have a waiver and I may be magnanimous, do your best according to my lights and I may let you off", is not something which will attract the Opposition or anyone who believes in local government autonomy.

Of course, we all believe that there must be limits on the amount of money provided by national Government to local government. Of course, that must be consistent with the Government's overall economic plans and their public expenditure programme. But what we do not believe is that that money should be, or can be, distributed in a way which coerces individual local authorities to behave in a way that the Secretary of State of the day happens to think right. It is because we are grossly offended by the embodiment of that principle in the Bill that we shall vote for the amendment.

Question put, That the amendment be made: —

The House divided: Ayes 241, Noes 274.

Division No. 392]
AYES
[6.05 pm


Abse, Leo
Beith, A. J.
Callaghan, Rt Hon J. (Cardiff SE)


Adams, Allen
Benn, Rt Hon Anthony Wedgwood
Callaghan, Jim (Middleton &amp; P)


Allaun, Frank
Bennett, Andrew (Stockport N)
Campbell, Ian


Alton, David
Bidwell, Sydney
Campbell-Savours, Dale


Anderson, Donald
Boothroyd, Miss Betty
Canavan, Dennis


Archer, Rt Hon Peter
Bottomley, Rt Hon Arthur (M'brough)
Carmichael, Neil


Ashton, Joe
Bray, Dr Jeremy
Carter-Jones, Lewis


Atkinson, Norman (H'gey, Tott'ham)
Brown, Hugh D. (Provan)
Cartwright, John


Bagler, Gordon A. T.
Brown, Robert C. (Newcastle W)
Clark, Dr David (South Shields)


Barnett, Guy (Greenwich)
Brown, Ronald W. (Hackney S)
Cocks, Rt Hon Michael (Bristol S)


Barnett, Rt Hon Joel (Heywood)
Brown, Ron (Edinburgh, Leith)
Cohen, Staniey


Beaumont-Dark, Anthony
Buchan, Norman
Concannon, Rt Hon J. D.




Conlan, Bernard
Jay, Rt Hon Douglas
Roberts, Allan (Bootle)


Cook, Robin F.
John, Brynmor
Roberts, Ernest (Hackney North)


Cowans, Harry
Johnson, Walter (Derby South)
Roberts, Gwilym (Cannock)


Craigen, J. M. (Glasgow, Maryhill)
Jones, Rt Hon Alec (Rhondda)
Robertson, George


Crowther, J. S.
Jones, Barry (East Flint)
Robinson, Geoffrey (Coventry NW)


Cryer, Bob
Jones, Dan (Burnley)
Robinson, Peter (Belfast East)


Cunliffe, Lawrence
Kaufman, Rt Hon Gerald
Rodgers, Rt Hon William


Cunningham, George (Islington S)
Kerr, Russell
Rooker, J. W.


Dalyell, Tam
Kilroy-Silk, Robert
Ross, Ernest (Dundee West)


Davidson, Arthur
Kinnock, Neil
Ross, Stephen (Isle of Wight)


Davies, Rt Hon Denzil (Llanelli)
Lambie, David
Rowlands, Ted


Davies, Ifor (Gower)
Lamborn, Harry
Ryman, John


Davis, Clinton, (Hackney Central)
Leadbitter, Ted
Sandelson, Neville


Davis, Terry (B'rm'ham, Stechford)
Leighton, Ronald
Sever, John


Deakins, Eric
Lestor, Miss Joan (Eton &amp; Slough)
Sheerman, Barry


Dean, Joseph (Leeds West)
Lewis, Arthur (Newham North West)
Sheldon, Rt Hon Robert (A'ton-u-L)


Dempsey, James
Lewis, Ron (Carlisle)
Shore, Rt Hon Peter (Step and Pop)


Dixon, Donald
Litherland, Robert
Short, Mrs Renée


Dobson, Frank
Lofthouse, Geoffrey
Silkin, Rt Hon John (Deptford)


Dormand, Jack
Lyon, Alexander (York)
Silkin, Rt Hon S. C. (Dulwich)


Douglas, Dick
Lyons, Edward (Bradford West)
Silverman, Julius


Douglas-Mann, Bruce
McCartney, Hugh
Skinner, Dennis


Dubs, Alfred
McDonald, Dr Oonagh
Smith, Rt Hon J (North Lanarkshire)


Duffy, A. E. P.
McElhone, Frank
Snape, Peter


Dunn, James A. (Liverpool, Kirkdale)
McGuire, Michael (Ince)
Soley, Clive


Dunnett, Jack
McKay, Allen (Penistone)
Spearing, Nigel


Dunwoody, Mrs Gwyneth
McKelvey, William
Spriggs, Leslie


Eastham, Ken
MacKenzie, Rt Hon Gregor
Stallard, A. W.


Edwards, Robert (Wolv SE)
Maclennan, Robert
Steel, Rt Hon David


Ellis, Raymond (NE Derbyshire)
McNally, Thomas
Stoddart, David


Ellis, Tom (Wrexham)
McNamara, Kevin
Stott, Roger


English, Michael
McTaggart, Robert
Strang, Gavin


Ennals, Rt Hon. David
McWilliam, John
Straw, Jack


Evans, Ioan (Aberdare)
Magee, Bryan
Summerskill, Hon Dr Shirley


Evans, John (Newton)
Marks, Kenneth
Taylor, Mrs Ann (Bolton West)


Faulds, Andrew
Marshall, David (Gl'sgow, Shettles'n)
Thomas, Jeffrey (Abertillery)


Field, Frank
Marshall, Dr Edmund (Goole)
Thomas, Mike (Newcastle East)


Flannery, Martin
Marshall, Jim (Leicester South)
Thomas, Dr Roger (Carmarthen)


Fletcher, Ted (Darlington)
Martin, Michael (Gl'gow, Springb'rn)
Thorne, Stan (Preston South)


Foot, Rt Hon Michael
Maxton, John
Tilley, John


Ford, Ben
Maynard, Miss Joan
Tinn, James


Forrester, John
Mellish, Rt Hon Robert
Torney, Tom


Foster, Derek
Millan, Rt Hon Bruce
Urwin, Rt Hon Tom


Fraser, John (Lambeth, Norwood)
Miller, Dr M. S. (East Kilbride)
Varley, Rt Hon Eric G.


Freeson, Rt Hon Reginald
Mitchell, Austin (Grimsby)
Wainwright, Edwin (Dearne Valley)


Freud, Clement
Mitchell, R. C. (Soton, Itchen)
Wainwright, Richard (Coine Valley)


Garrett, John (Norwich S)
Morris, Rt Hon Alfred (Wythenshawe)
Walker, Rt Hon Harold (Doncaster)


George, Bruce
Morris, Rt Hon Charles (Openshaw)
Watkins, David


Gilbert, Rt Hon Dr John
Morris, Rt Hon John (Aberavon)
Weetch, Ken


Ginsburg, David
Morton, George
Wellbeloved, James


Gourlay, Harry
Moyle, Rt Hon Roland
White, Frank R. (Bury &amp; Radcliffe)


Graham, Ted
Newens, Stanley
White, James (Glasgow, Pollok)


Grant, John (Islington C)
Oakes, Rt Hon Gordon
Whitehead, Phillip


Grimond, Rt Hon J.
Ogden, Eric
Whitlock, William


Hamilton, W. W. (Central File)
O'Halloran, Michael
Wigley, Dafydd


Harrison, Rt Hon Walter
O'Neill, Martin
Willey, Rt Hon Frederick


Hattersley, Rt Hon Roy
Orme, Rt Hon Stanley
Williams, Rt Hon Alan (Swansea W)


Haynes, Frank
Palmer, Arthur
Williams, Sir Thomas (Warrington)


Healey, Rt Hon Denis
Park, George
Wilson, William (Coventry SE)


Heffer, Eric S.
Parker, John
Winnick, David


Hogg, Norman (E Dunbartonshire)
Parry, Robert
Woodall, Alec


Holland, Stuart (L'beth, Vauxhall)
Pavitt, Laurie
Woolmer, Kenneth


Home Robertson, John
Pendry, Tom
Wrigglesworth, Ian


Homewood, William
Powell, Raymond (Ogmore)
Wright, Sheila


Hooley, Frank
Prescott, John
Young, David (Bolton East)


Horam, John
Price, Christopher (Lewisham West)



Howells, Geraint
Race, Reg
TELLERS FOR THE AYES:


Hudson Davies, Gwilym Ednyfed
Radice, Giles
Mr. James Hamilton and Mr. Donald Coleman.


Hughes, Mark (Durham)
Rees, Rt Hon Merlyn (Leeds South)



Hughes, Robert (Aberdeen North)
Richardson, Jo





NOES


Aitken, Jonathan
Benyon, Thomas (Abingdon)
Bowden, Andrew


Alexander, Richard
Benyon, W. (Buckingham)
Braine, Sir Bernard


Allson, Michael
Best, Keith
Bright, Graham


Amery, Rt Hon Julian
Bevan, David Gilroy
Brinton, Tim


Ancram, Michael
Biffen, Rt Hon John
Brittan, Leon


Arnold, Tom
Biggs-Davison, John
Brocklebank-Fowler, Christopher


Atkins, Robert (Preston North)
Blackburn, John
Brooke, Hon Peter


Baker, Kenneth (St. Marylebone)
Blaker, Peter
Brotherton, Michael


Baker, Nicholas (North Dorset)
Body, Richard
Brown, Michael (Brigg &amp; Sc'thorpe)


Banks, Robert
Bonsor, Sir Nicholas
Bruce-Gardyne, John


Bell, Sir Ronald
Boscawen, Hon Robert
Bryan, Sir Paul


Bendall, Vivian
Bottomley, Peter (Woolwich West)
Buchanan-Smith, Hon Alick







Buck, Antony
Hooson, Tom
Porter, George


Budgen, Nick
Hordern, Peter
Price, David (Eastleigh)


Bulmer, Esmond
Howe, Rt Hon Sir Geoffrey
Proctor, K. Harvey


Burden, F. A.
Howell, Rt Hon David (Guildford)
Raison, Timothy


Butcher, John
Howell, Ralph (North Norfolk)
Rees, Peter (Dover and Deal)


Butler, Hon Adam
Hunt, David (Wirral)
Renton, Tim


Carlisle, John (Luton West)
Hunt, John (Ravensbourne)
Ridley, Hon Nicholas


Carlisle, Kenneth (Lincoln)
Hurd, Hon Douglas
Ridsdale, Julian


Chalker, Mrs. Lynda
Irving, Charles (Cheltenham)
Rifkind, Malcolm


Channon, Paul
Jenkin, Rt Hon Patrick
Roberts, Wyn (Conway)


Clark, Hon Alan (Plymouth, Sutton)
Jessel, Toby
Ross, Wm. (Londonderry)


Clark, Sir William (Croydon South)
Johnson Smith, Geoffrey
Rossi, Hugh


Clarke, Kenneth (Rushcliffe)
Jopling, Rt Hon Michael
Rost, Peter


Clegg, Sir Walter
Joseph, Rt Hon Sir Keith
Royle, Sir Anthony


Cockeram, Eric
Kilfedder, James A.
Salnsbury, Hon Timothy


Colvin, Michael
Kimball, Marcus
St. John-Stevas, Rt Hon Norman


Cope, John
King, Rt Hon Tom
Scott, Nicholas


Cormack, Patrick
Kitson, Sir Timothy
Shaw, Giles (Pudsey)


Corrie, John
Knox, David
Shaw, Michael (Scarborough)


Costain, A. P.
Lamont, Norman
Shelton, William (Streatham)


Critchley, Julian
Lang, Ian
Shepherd, Colin (Hereford)


Crouch, David
Langford-Holt, Sir John
Shepherd, Richard (Aldridge-Br'hills)


Dean, Paul (North Somerset)
Latham, Michael
Shersby, Michael


Dorrell, Stephen
Lawrence, Ivan
Sims, Roger


Douglas-Hamilton, Lord James
Lawsort, Nigel
Skeet, T. H. H.


Dover, Denshore
Lee, John
Smith, Dudley (War. and Leam'ton)


du Cann, Rt Hon Edward
Lennox-Boyd, Hon Mark
Speller, Tony


Dunn, Robert (Dartford)
Lewis, Kenneth (Rutland)
Spence, John


Durant, Tony
Lloyd, Ian (Havant &amp; Waterloo)
Spicer, Michael (S Worcestershire)


Dykes, Hugh
Loveridge, John
Sproat, Iain


Eden, Rt Hon Sir John
Luce, Richard
Stainton, Keith


Edwards, Rt Hon N. (Pembroke)
Lyell, Nicholas
Stanbrook, Ivor


Eggar, Timothy
McCrindle, Robert
Stanley, John


Elliott, Sir William
MacGregor, John
Steen, Anthony


Emery, Peter
MacKay, John (Argyll)
Stevens, Martin


Eyre, Reginald
Macmillan, Rt Hon M. (Farnham)
Stewart, Ian (Hitchin)


Fairbairn, Nicholas
McNair-Wilson, Michael (Newbury)
Stewart, John (East Renfrewshire)


Faith, Mrs. Sheila
McNair-Wilson, Patrick (New Forest)
Stokes, John


Farr, John
McQuarrie, Albert
Stradling Thomas, J.


Fell, Anthony
Madel, David
Tapsell, Peter


Fenner, Mrs Peggy
Major, John
Taylor, Robert (Croydon NW)


Finsberg, Geoffrey
Marlow, Tony
Taylor, Teddy (Southend East)


Fisher, Sir Nigel
Mates, Michael
Temple-Morris, Peter


Fletcher, Alexander (Edinburgh N)
Mather, Carol
Thatcher, Rt Hon Mrs Margaret


Fletcher-Cooke, Charles
Maude, Rt Hon Angus
Thomas, Rt Hon Peter (Hendon S)


Fookes, Miss Janet
Mawby, Ray
Thompson, Donald


Forman, Nigel
Mawhinney, Dr Brian
Thorne, Neil (Ilford South)


Fowler, Rt Hon Norman
Maxwell-Hyslop, Robin
Thornton, Malcolm


Fox, Marcus
Mellor, David
Townend, John (Bridlington)


Fraser, Rt Hon. H. (Stafford &amp; St)
Meyer, Sir Anthony
Townsend, Cyril D. (Bexleyheath)


Fraser, Peter (South Angus)
Miller, Hal (Bromsgrove &amp; Redditch)
Trippler, David


Galbraith, Hon T. G. D.
Mills, Iain (Meriden)
Trotter, Neville


Gardiner, George (Reigate)
Mills, Peter (West Devon)
van Straubenzee, W. R.


Gardner, Edward (South Fylde)
Miscampbell, Norman
Vaughan, Dr. Gerard


Garel-Jones, Tristan
Mitchell, David (Basingstoke)
Viggers, Peter


Glyn, Dr. Alan
Moate, Roger
Waddington, David


Goodhew, Victor
Monro, Hector
Wakeham, John


Goodlad, Alastair
Montgomery, Fergus
Waldegrave, Hon William


Gow, Ian
Morris, Michael (Northampton, Sth)
Walker, Bill (Perth &amp; E Perthshire)


Grant, Anthony (Harrow C)
Morrison, Hon Charles (Devizes)
Walker-Smith, Rt Hon Sir Derek


Gray, Hamish
Morrison, Hon Peter (City of Chester)
Wall, Patrick


Greenway, Harry
Murphy, Christopher
Ward, John


Grieve, Percy
Myles, David
Warren, Kenneth


Griffiths, Eldon (Bury St. Edmonds)
Nelson, Anthony
Watson, John


Griffiths, Peter (Portsmouth N)
Neubert, Michael
Wells, John (Maidstone)


Grist, Ian
Newton, Tony
Wells, Bowen (Hert'rd &amp; Stevn'age)


Gummer, John Selwyn
Onslow, Cranley
Wheeler, John


Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Oppenheim, Rt Hon Mrs Sally
Whitelaw, Rt Hon William


Hamilton, Michael (Salisbury)
Osborn, John
Whitney, Raymond


Hampson, Dr Keith
Page, John (Harrow, West)
Wickenden, Keith


Havers, Rt Hon Sir Michael
Page, Rt Hon Sir R. Graham
Wilkinson, John


Hawkins, Paul
Page, Richard (SW Hertfordshire)
Williams, Delwyn (Montgomery)


Hawksley, Warren
Parris, Matthew
Winterton, Nicholas


Hayhoe, Barney
Patten, Christopher (Bath)
Wolfson, Mark


Heddle, John
Patten, John (Oxford)
Young, Sir George (Acton)


Henderson, Barry
Pattie, Geoffrey
Younger, Rt Hon George


Heseltine, Rt Hon Michael
Pawsey, James



Hicks, Robert
Percival, Sir Ian
TELLERS FOR THE NOES:


Higgins, Rt Hon Terence L.
Peyton, Rt Hon John
Mr. Spencer Le Marchant and Mr. Anthony Berry.


Hogg, Hon Douglas (Grantham)
Pink, R. Bonner



Holland, Philip (Carlton)
Pollock, Alexander



Question accordingly negatived.

Orders of the Day — Clause 38

REDUCTION OF RESOURCES ELEMENT

The Under-Secretary of State for the Environment (Mr. Marcus Fox): I beg to move amendment No. 80, in page 32, line 38, leave out
'a report under section 4(2) of the local Government Act 1974'
and insert:
'an order made by statutory instrument by the Secretary of State'.

Mr. Deputy Speaker: With this, we may discuss Government amendments Nos. 81 to 84.

Mr. Fox: These amendments fulfil the promises made in Committee by my right hon. Friend the Secretary of State on 18 March that, subject to the withdrawal of Opposition amendments Nos. 264, 299 and 300, he would table amendments to the effect that determination under clauses 38 and 39 would be specified in an order subject to the affirmative resolution procedure, Clauses 38 and 39 as they stand deal with transitional arrangements and relate to the variation of grant by the use of a multiplier specified in a report under section 42 of the Local Government Act 1974. Such a report, which gives details of the rate support grant order, is not subject to a vote. The amendments provide that the principles on which the multipliers are determined should be specified in an order made by statutory instrument subject to affirmative resolution, thus ensuring that the House would have an opportunity to consider and discuss them prior to their coming into effect. They abide by a promise made in Committee.

Amendment agreed to.

Amendment made: No. 81, in page 32, line 41, at end add—
'(6) An order under this section shall be laid before the House of Commons and shall not have effect until approved by a resolution of that House; and no determination shall be made under this section until the order has effect'.—[Mr. Fox.]

Orders of the Day — Clause 39

REDUCTION OF NEEDS ELEMENT FOR AUTHORITIES IN GREATER LONDON

Amendments made:

No. 82, in page 33, line 15, leave out
'specified in a report under section 4(2) of that Act'

and insert:
'determined on principles specified in an order made by statutory instrument by the Secretary of State'.

No. 83, in page 33, line 19, leave out subsection (4).

No. 84, in page 33, line 23, at end add—
'(6) An order under this section shall be laid before the House of Commons and shall not have effect until approved by a resolution of that House; and no variation shall be made under this section until the order has effect.'.—[Mr. Fox.]

Orders of the Day — Clause 40

SUPPLEMENTARY GRANTS FOR TRANSPORT PURPOSES

Mr. Fox: I beg to move amendment No. 85, in page 33, line 36, leave out 'The' and insert 'Any such'.
The purpose of the amendment is to put it beyond doubt that there can be more than one order relating to supplementary grants, and that each order will be made by the Minister of Transport or, as the case may be, the Secretary of State. The matter arises because of the difference between the position which obtains in England and that which obtains in Wales.

Mr. Neil Thorne: I am a little concerned about the clause and I hope that my hon. Friend will be able to reassure me. It would appear that transport supplementary grant is still capable of being abolished by the Bill. London is a very special case. If adequate transport facilities were not provided partially at the public expense, it would be an intolerable burden for the capital local authority to have to provide alternative means of getting round the capital city.
The position concerning the new block grant leaves quite a lot of questions to be answered. It is very complicated and it seems to be almost as complicated as its predecessor. In relation to the transport supplementary grant, therefore, it should be made quite clear that the capital city will not be adversely affected.

Mr. Fox: I give my hon. Friend the assurance that he seeks. He may recall that we debated this matter in Committee, dealing with the impact that the abolition of the transport supplementary grant would have on London in particular. I thought that I had satisfied my hon.


Friend that we appreciated that London has particular problems, and that in no circumstances should we want the disadvantage that he has described to arise. I shall draw the attention of my right hon. Friend the Minister of Transport to my hon. Friend's observations.

Amendment agreed to.

Mr. Fox: I beg to move amendment No. 86, in page 34, line 4, at end add—
'(5A) The power to make orders under this section includes power, from the beginning of the commencing year, to specify different years in relation to England and to Wales and to make other different provision in relation to them.'.
The amendment does not reflect any change in policy, since it has always been the intention that the provisions of clause 40 (2) in relation to the discontinuance of transport supplementary grant should operate quite independently in England and in Wales, within the framework of the new separate rate support grant system. The amendment provides accordingly.

Amendment agreed to.

Orders of the Day — Clause 42

INTRODUCTION OF NEW SYSTEM OF RATE SUPPORT GRANT

Mr. Fox: I beg to move amendment No. 87, in page 34, line 30, at end add—
'(2A) Rate support grants as defined in section 1 of the Local Government Act 1974 shall not be payable for the commencing year or for any subsequent year.'.
The purpose of the amendment is to provide for the termination of the rate support grant system established by sections 1 to 5 of the Local Government Act 1974.
The amendment is a technical one to tie up loose ends in much the same way as paragraph 1 of schedule 1 to the 1974 Act stopped all payments under the Local Government Act 1966. But this time it is simpler because there is no local government reorganisation to take into account.

Amendment agreed to.

Mr.Fox: I beg to move amendment No. 89, in page 35, line 16, leave out 'section' and insert 'Part of this Act'.
This is a technical amendment. It makes clear that definition contained

in clause 42(8) applies to the whole of part VI, not just to this clause.

Amendment agreed to.

Mr. Fox: I beg to move amendment No. 90, in page 35, line 25, leave out from '40' to end of line 27 and insert:
'and 41(1)(a) and 2 above;

(b) section 56(3) below;
(c) the provisions of the Local Government Act 1974 specified in Schedule 7 to this Act;
(d) paragraph 30A of Schedule 25 to this Act; and
(e) section 48(1B)(a) of the General Rate Act 1967 (standard amount for purposes of domestic rate relief)'.

The amendment adds Clause 41, subsections (1)(a) and (2), paragraph 30A of schedule 25, and section 48(1B)(a) of the General Rate Act 1967, to the list of enactments which may be repealed by statutory instrument at a later date. They all relate to the transitional period and will no longer be necessary on the commencement of block grant.

Clause 41, subsections (1)(a) and (2), relate to payments to specified bodies under section 2(7)(a) of the local Government Act 1974. Paragraph 30A of schedule 25 amends section 1(2) of the Local Government Act 1974, to take account of grant to be paid to rating authorities to compensate them for revenue lost by rating exemptions in enterprise zones.

Section 48(1B)(a) of the General Rate Act 1967 relates to domestic rate relief grant under paragraph 5 of schedule 2 to the Local Government Act 1974.

The relevant parts of the Local Government Act 1974 are to be repealed after the commencement of block grant and, suitably modified, are included in part VI of this Bill.

Amendment agreed to.

Orders of the Day — Clause 43

THE AGGREGATE AMOUNT OF RATE SUPPORT GRANTS

Mr. Fox: I beg to move amendment No. 91, in page 35, line 37, leave out 'and'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 92 and 93.

Mr. Fox: The amendments make clear that grants paid to reimburse authorities the rate revenue forgone in enterprise zones shall be entirely additional to rate support grants and associated grants in respect of expenditure.
My right hon. Friend made clear in Committee that this was the case. It is now necessary to put the question beyond doubt by adding a reference to enterprise zone grants in subsections (1) and (2) of clause 43, where other grants extraneous to the rate support grants are already listed.

Amendment agreed to.

Amendments made:

No. 92, in page 35, line 38, at end add—
'and

(d) grants under paragraph 29 of Schedule 25 to this Act'.

No. 93, in page 36, line 6, at end add—
'(iii) grants under paragraph 29 of Schedule 25 to this Act; and'.—[Mr. Fox.]

Mr. Fox: I beg to move amendment No. 94, in page 36, line 45, leave out 'and'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 95.

Mr. Fox: This is a consolidating amendment. Clause 43 contains the central definition of what is relevant expenditure for rate support grant. That definition has been modified by clause 111 of the Housing Bill. To avoid confusion, the change needs to be referred to in this clause.

Amendment agreed to.

Amendment made:

No. 95, in page 37, line 2, at end add:
'and

(d) to section 111(3) of the Housing Act 1980 (rate fund contributions under section 3(4) of the Housing Rents and Subsidies Act 1975)'.—[Mr. Fox.]

Mr. Fox: I beg to move amendment No. 96 in page 37, line 29, leave out '(b)' and insert 'and'.
The amendment corrects a drafting error which was made in correcting a printing error in the first published print

of the Bill. The grants mentioned in subsection (b) are also to the Receiver of the Metropolitan Police District and should come under subsection (a). We are then back to the position in which we should have been when the Bill was published, that is to say, to have the same effect as in the 1974 Act.

Amendment agreed to.

Orders of the Day — Clause 45

THE BLOCK GRANT

Mr. King: I beg to move amendment No. 97, in page 38, line 26, at end add—
'(2A) If—

(a) the council of a county, the Greater London Council or the Inner London Education Authority give notice to the Secretary of State that they do not wish to be paid block grant for any year; and
(b) he gives them notice that he consents to it not being paid to them,
no amount shall be payable to them by way of that grant for that year.
(2B) Any amount that would have been payable to them shall be distributed among the appropriate authorities, as part of their block grant for the year.
(2C) In subsection (2B) above "the appropriate authorities" means—

(a) in relation to the council of a county, the councils of the districts in the county;
 (b) in relation to the Greater London Council, the London borough councils and the Common Council of the City of London; and
(c) in relation to the Inner London Education Authority, those of the councils mentioned in paragraph (b) above whose areas are in the Inner London Education Area.
(2D) The amount to be paid to an authority under subsection (2B) above shall bear the same proportion to the amount that would have been payable to the county council or the Greater London Council or the Inner London Education Authority as the gross rateable value of the authority's area bears to the gross rateable value of the county, Greater London or the Inner London Education Area, as the case may be.'.
I undertook to table such an amendment in the light of the assurance that I gave to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). He and his hon. Friends withdrew a similar amendment which was technically incorrect. This amendment enables county councils, the GLC and the ILEA to opt out of receiving block grant if the Secretary of State agrees. In such cases, the grant that they would have


received is paid instead to authorities on which they precept and thus remains in their area. I make clear that there is no implication that the Government will necessarily give their consent to the non-payment of grant to certain authorities. The amendment fulfils the undertaking that we gave in Committee, and I ask the House to approve it.

Amendment agreed to.

Mr. King: I beg to move amendment No. 98, in page 38, line 30, leave out 'standard rate' and insert 'grant-related'.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may take the following amendments:

No. 299, in page 38, line 30, leave out 'standard' and insert 'notional'.

Government amendment No. 99.

No. 300, in page 38, line 38, leave out from beginning to end of line 41 and insert
'"notional expenditure", for the purpose of grant distribution in relation to each authority to whom block grant is to be payable for any year would be a single figure for each authority, having regard to their functions, and expressed as an amount per head of population'.

No. 302, in page 39, line 1, leave out 'standard' and insert 'notional'.

No. 301, in page 39, line 5 leave out 'standard' and insert 'notional'.

No. 304, in clause 46, page 39, line 7, leave out 'standard' and insert 'notional'.

Government amendments Nos. 100, 105 and 107.

No. 293, in clause 46, page 39, line 31, leave out 'standard' and insert 'notional'.

No. 294, in clause 46, page 39, line 31, leave out 'standard' and insert 'notional'.

Government amendment No. 109.

No. 295, in clause 46, page 39, line 34, leave out 'standard' and insert 'notional'.

No. 296, in clause 46, page 39, line 35, leave out 'standard' and insert 'notional'.

Government amendment No. 115.

No. 297, in clause 47, page 39, line 41, leave out 'standard' and insert 'notional'.

Government amendment No. 119.

No. 298, in clause 47, page 40, line 12, leave out 'standard' and insert 'notional'.

Government amendment No. 312.

Mr. King: You have the admiration of all of us, Mr. Deputy Speaker.
Government amendments No. 98 to 100 and the consequential amendments change the terminology in the Bill. That is a matter on which there was much discussion and on which local authority associations suggested improvements to the block grant arrangements They raised the question of the prescriptive nature of both standard rate poundage and standard rate expenditure. We discussed several alternatives. The Association of Metropolitan Authorities was interested in notional expenditure, and that appears in a later Opposition amendment.
There is now fairly wide agreement that the Government's suggested alternative of grant-related poundage and grant-related expenditure is satisfactory and, as I understand, it has the support of the Association of County Councils, the ADC and the AMA. It makes clear that this is in no sense a prescriptive definition by central Government of what the local authorities should spend, but is the basis on which grant will be distributed. As there has been much misunderstanding over block grant, and although some people may feel that terminology is not important, in this case it is a significant improvement in making the purpose clear.
There are a number of other Government amendments in this group. Government amendment No. 105 is purely a drafting amendment. Government amendment No. 312 tidies up a technical point, and I hope that it will not cause difficulties for hon. Members. Amendments Nos. 293 to 304 are Opposition amendments in the name of the right hon. Member for Sparkbrook, and cover the notional expenditure to which I referred. Government amendments Nos. 101, 103 and 104 state that the Secretary of State may defray any expenditure incurred in any year in the provision of services for local authorities, by any body specified in the regulations made by the Secretary of State. The body particularly in mind is LAMSAC—the Local Authority Management Services Advisory Committee—and local and central Government contribute towards the common services that it provides. It is necessary to ensure that the Bill provides for that grant being defrayed.

Mr. Ted Graham: This is the first opportunity we have of debating the block grant, and hon. Members on both sides of the House know that this is one of the prime parts of the Bill. The Opposition still need clarification from the Minister as to the relationship which has existed, and which still exists, between his officials and the working party on various matters, and particularly on the evidence that we received from the local authority associations as to their complete hostility to the Bill, even though from time to time they are prepared to deal with matters concerning the Bill.
The Minister pointed out that Government amendment No. 99 covering changes in terminology results from discussions with local authorities. The House is entitled to be puzzled, because, as recently as last week, hon. Members received a report from the local authority associations saying that
The associations jointly put forward a proposal to modify the operation of the existing rate support grant system to meet the objectives of the grant system set out by the Secretary of State in the Second Reading debate on the Bill. That proposal was rejected.
I appreciate that we are not discussing the principle of a block grant in this series of amendments. However, the report from the associations indicated that although the Minister invited them to make their views known,
The Minister's reply indicates that only minor changes will be made by the Government at Report stage.
Is the Minister saying that these amendments contain some of the minor changes that the Government have accepted? In that report from the associations, we are told that
The AMA continues to believe that the block grant system as drafted represents a serious threat to local autonomy and the future of local democracy because of the power that it would give to any Secretary of State to make decisions on local government grants in such a way that individual local authorities might be penalised by Government even though they, the local authorities, were acting properly within the law.
Later, we shall attack the main provisions of the block grant. We shall do so against the reports in The Guardian last week in which the chairman of the Association of County Councils, Sir Gervas Walker, said:
The association's hostility to the legislation's financial proposals was undiminished …

the association is coming to believe that the type of block grant envisaged by the legislation would be unworkable. The problem is how to go about persuading MPs that this is the case … By demonstrating the possibility of the block grant being operated or manipulated by the wrong hands in the future, we would carry a greater measure of support in Parliament than by making simple technical points which members would not understand.
This Bill is a welter of new terminology which has been dreamt up by officials in the Department of the Environment and which one assumes has been hammered out in discussions with officials of the associations. It then has to be given some credence and understood by Ministers and hon. Members. It then has to be passed from this House, and understood by the treasurers and town clerks in town halls. It has then to be understood by councillors, by ratepayers' associations and the like and, finally by ordinary ratepayers.
Does the Minister believe that the many new terms which have been devised to give flesh to the Government's intentions—we had a good run as to what they were in the previous debate—are necessary? Does he believe that all this potential chaos, confusion and misunderstanding is necessary? Does he believe that the exercise upon which he is engaged is necessary if he wants to take the local authority associations with him? The people to whom we talk are desperately anxious to do what the Government wish in financial terms, but they are better able to produce something which is workable, understood and more acceptable not only to themselves but to ordinary ratepayers.
I hope that as we enter into the major debate on the block grant the Minister will at the end be able to give us some answers.

Mr. Alton: I wish that I could support the Government's amendments. Anyone who has been involved in local government inevitably has a certain disregard for the rate support grant system and is aware of its inadequacies. Unfortunately, many people in local government are even more suspicious about what the Minister is seeking to put in its place. Throughout local government I have not known an occasion when so many people from different sides of the political spectrum have been so united in their opposition to the new block


grant system. The Conservative-controlled metropolitan authorities, the Association of District Councils, the Association of Chief Executives and local authorities of different complexions all over the country are united in their opposition to this new block grant system.
Certain elements in the block grant system could have commended themselves, because there is a desperate need to change the way in which the rate support grant system operates. I share the Minister's view that there must be some control over the way that local government funding is operated, but in many ways we are introducing a system almost of central dictatorship.
It is ironic that a Government who in the past prided themselves on being the bastion of support for local democracy should find local government turning on them and saying that they are doing local government the greatest disservice possible since the reorganisation of local government perpetrated by the previous Conservative Government in 1973. Disraeli once said that centralism was the death blow to democracy. This new system of block grants will centralise control over local government funding.
If we take power away from local authorities by limiting the amount of money that they can spend and say that we will introduce punitive measures against them if they are profligate, people will be driven out of local government. They will say "What is the point of becoming councillors if we do not get the opportunity to operate in our local communities and take decisions for ourselves?"
In some respects the Government are taking a sledge-hammer to crack a nut. It would have been easier to stop the few profligate local authorities by exercising greater discretion through the rate support grant system or by replacing it with something more equitable.
In September 1974 the right hon. Lady, now the Prime Minister, said that the incoming Conservative Government would commit themselves to the abolition of the domestic rating system. Several years later the Government have or had the opportunity in this Bill to do just that. However, they have run away from that opportunity. Instead, they have given

us this highly unsatisfactory new block grant system.
The claim was that the objective of the Bill was to give local authorities more control over their own finances. But it is manifestly clear that local authorities do not believe that will happen. Another claim was that this would be a simplified system. In fact, it will be far more complex.
The Guardian, on 24 March, commenting on this legislation stated:
The cornerstone of the system will thus be a massive investigation of every local authority service by civil servants combined with the implementation of a complex set of ground rules to work out whether an authority has overspent … The Labour Opposition has only been given one four-page document explaining its effects. The Guardian's 13 documents "—
which it said had been leaked to it—
run to thousands of words explaining in detail how the new grant will work".
The Minister said that the Government had not worked out the details of the transitional arrangements and that the House would have to be patient and wait to hear the details later in the year.
6.45 pm
Members of Parliament are sometimes expected to vote blindly on the word of a Minister. I accept the good word of the Minister, but I am not so sure about the word of his right hon. Friend the Secretary of State, who has frequently treated local government with scant regard, if not great contempt. He has not had adequate discussions with local authorities. He announced his new proposals without consulting them and then had to issue an apology to the Association of Metropolitan Authorities because he had not taken the trouble to have discussions with it at that time. He has done local government and its relations with central Government a great disservice because of the arrogant and high-handed way in which he has gone about things.
The third element of the block grant system includes this punitive measure of punishment of the big spenders. Many local authorities are having to take cruel and crude decisions. The exchange earlier today exemplified that situation. Local authorities will have to declare redundancies and cut back on capital programmes. They will have to try to search out waste in an effort to comply


with the Government's guidelines. The situation is no different from what it was under the previous Government. Indeed, I would expect any Government to try to operate some sort of overall guidelines for local authorities. But the danger is that local authorities which have tried to be good housekeepers will be penalised, whereas authorities with a tradition of profligacy may find under the new system that they suffer no kind of action against them.
We dealt with the transitional arrangements earlier. Suffice it to say that they are highly unsatisfactory and go no way way towards ensuring harmony or continuity in local government.
The retention of the rate support grant in its new form will mean that only two elements will exist: first, the domestic rate relief grant and, secondly, the block grant. The Secretary of State said that it would be easier for the public to understand. I dispute that. My friends in local government say that the new complex ground rules will be difficult to understand and they are anxious to know how they will operate the system. The AMA put its finger on it when it said that the whole system would be more complicated.
We have this strange turn-round. The Conservative Government have traditionally said that they were opposed to centralisation and that they supported local government, but they are now doing their best to undermine the autonomy of local government. If we constrain local government by cutting off its finance and ensure that little control is exercised by local councillors because it is being exercised in Marsham Street, people of good will will inevitably be driven out of local government. Local councils will feel put upon when the dead hand of the Secretary of State is placed upon them.
Now we have a Labour Opposition who in Government showed a passion for centralisation. For example, education decisions were taken away from local authorities and placed in the hands of central Government. But here they are at long last accepting the need for local authorities, which best know the problems in their areas, to take more de-

cisions for themselves and to determine their own priorities.

Mr. Hattersley: As a matter of historical accuracy, rather than a matter of complaint, it was in fact a Liberal Government who made education a national rather than a local service, under Mr. Forster in 1870.

Mr. Alton: It was indeed, and it was a Labour Government that endeavoured later to take away from local authorities the decision as to the style of educational opportunity that they offered in their own areas. That is what I am complaining about. But all the time central Government, regardless of whether they provide a local service at a national level—and local government is a local service provided nationally—behave in a very arrogant "We know best" way. Indeed, the point that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was making earlier today was that sometimes local government knows better than central Government.
I think that one has to trust local government. Indeed, the Prime Minister at the time of Mr. Forster's Education Act said that one must put one's trust in the people. That is what this debate is about. It is about trusting people in local government who have been elected on a mandate to serve. They have been elected to govern and to take decisions in their localities. I think that they are often far better qualified and able to do that than we are on these Benches. Therefore, I do not think that we should introduce punitive measures.
Imperfect as the present RSG system is, we ought to retain it until we can come up with something better. I reject the whole concept of the unitary grant system as being far worse than even what we have now.

Mr. King: I should like to respond, first, to the hon. Member for Edmonton (Mr. Graham). We asked the local authorities to put up suggestions to the associations. I think that the hon. Gentleman will recall that when the original concerns were being expressed about the block grant, initially some of the biggest concerns which were expressed were over the prescriptive nature of the whole structure of the block grant; that standard expenditure and standard


rate poundage carried the implication, with the publication of those figures, of central Government determining what local authorities ought to spend. Certainly in the initial stages they were the prime concerns of local governent as expressed to us. The associations subsequently wrote us a letter, in response to my suggestions, in which they added one or two other items that were also of concern. I was, therefore, disappointed when I saw their response to my letter, in which I conceded what had been the main points of concern to them in their original submissions, for they then rather tended to dismiss them as more minor points.
I think that we shall be debating the issue of negative marginal rates of grant. On that, I had made clear that we would be prepared to do something below standard expenditure, but I think, as we have explained the implications of doing that, the associations have perhaps felt that they did not wish to pursue that aspect.
We have also made clear that we are willing to include—we have an amendment down to do so—the definition of the use of the multiplier, which will circumscribe what might otherwise be considered an arbitrary use of the multiplier.
In those respects, I hope that we have responded rather more adequately than perhaps the reply indicated. We have not met the associations in every respect. I was a little disappointed in the way in which they described our response.

Mr. Graham: Is the Minister saying that the terminology used by the associations, that the Government have accepted minor suggestions, is true or false? The view of what the Government have accepted, as far as the associations are concerned—I quote from their brief—is that
The Minister's reply indicates that only minor changes will be made by the Government at Report stage.
Does the Minister agree with that assessment by the associations?

Mr. King: No, certainly not. I did not say that they were minor. Those are not my words. The complaint that I am making is that what I originally represented as major areas of concern are then, when the concessions are made, described as minor concessions. I was a little disappointed about that.
I should like now to comment on the remarks of the hon. Member for Liverpool, Edge Hill (Mr. Alton). I have heard these comments before. I think that the hon. Gentleman will not mind my saying that they were all generalisations. Some of them were based on press comment, about which I have already made some comment myself, in Committee as well as elsewhere. We have sought to put in front of people—for instance, the Committee—an accurate summary of what is some very complicated matter indeed. I concede straight away that it is complicated.
I do not concede that it is more complicated than what has preceded it. I would be very happy to make available to the hon. Gentleman some of the papers that have been involved every year in the grants working group discussions. I think that the hon. Gentleman would plead for mercy pretty quickly after I started to bombard him with the sort of material that exists in this matter. Some of the grants working group papers are not confined to the Department of the Environment but are spread around a vast range of working groups, as my right hon. and learned Friend the Member for Hexham (Mr. Rippon) knows, and people in the associations. Some people occasionally seem to have handed them to the press. Good luck to the press with them. I should think that the press finds them as confusing as the ordinary layman would.
As regards the comment about vast volumes of documents, what we sought to issue was a summary report of working to date—which is not four pages; I have just counted it, and it is some 20 pages—of fairly condensed information. It is not the easiest read that I can recommend to hon. Members; it deals with what is a complex matter, as I have said, of the mechanics of distribution of £9,600 million fairly between 454 different authorities. Of course, in searching after the fairest basis on which to do that, the officials—not just in my Department but of other Government Departments involved in local authority services—the officers of the local authority associations, and professional officers from individual authorities which are all involved in these grants working groups examine considerable areas of detail in trying to arrive at the fairest basis for this distribution.
I reject utterly the suggestion that this is somehow an attack on local government, that it is the end of local government autonomy. The hon. Member for Edge Hill said "Trust in the people; trust in local government." I happen to believe in that. I would not preside over something of this kind if I believed that it was seriously undermining that relationship. This is concerned with the distribution of public money. I have listened to these generalisations, and at no time when they are challenged are they found to be substantiated.
There are things that one could do in local government and ways in which local government finance could be approached by central Government which would substantially undermine the autonomy and freedom of action of local authorities. Some people have suggested imposing individual cash limits on every authority. That would be a very serious step indeed. There are other ways in which one could affect the autonomy and the financial independence of local government. But our proposals are concerned purely with the method by which the public money involved in the RSG is distributed. That is surely a proper concern for Ministers and this House.
Our proposals have to be submitted to the House. They will not be implemented unless this House approves them. When the public funds have been distributed, it is then a matter for individual local authorities and their councillors as to what their expenditure decisions are. It is their choice between services, their choice as to the volume of expenditure on those services, and their choice as to the rate levels that they decide to impose.
That is the freedom and discretion that exists in local government. It is this partnership: public, ministerial and parliamentary responsibility for the public funds, the national taxpayers' funds, paid to local government; the local councillors' responsibility for the final rating decisions and the expenditure of their own local authority. That is the basis on which the local government and central Government partnership exists. We each have our responsibility to our own electorates in that respect. I challenge anyone to tell me how our proposals for what we believe will prove to be a fairer and a simpler method of

grant distribution actually undermine that basic autonomy of local government.

Mr. Alton: What I was trying to do in my earlier remarks was not just to point out my personal views about the new system that the Minister is introducing but to talk about the partnership, about which he is concerned, with the local authority associations. Why does he think that every one of the major local authority associations has rejected these unitary grant proposals as, first, being more complex and, second, as undermining local government autonomy?

Mr. King: I think that there were considerable misunderstandings in the early stages. I think that there were some thoughts that this was identical to a proposal introduced by the previous Government and then discarded. But the associations did not realise the safeguards and the improvements that we intended to incorporate within the scheme. There is a similarity with the previous Government's proposal, because it involves one grant instead of two. It involves a 100 per cent. deficit grant between what resources will produce at a standard rate or at a grant-related poundage, and what the grant-related expenditure assessment is. It will replace the two grants now paid, namely, the resources grant and the needs grant.
7 pm
At the beginning, there were misunderstandings. There was fear of change and uncertainty. No local authority would endorse the proposal, for one simple reason. Local authorities do not know how the pattern of distribution will affect them. If a local authority leader were to stand on a platform and say that he warmly endorsed the provision he would do so at the risk that his authority would suffer. He would be in some difficulties. I have always understood why nobody would give a warm welcome to a change in grant distribution arrangements.
There are difficulties. Anybody could point out the difficulties or say that it was a complex matter. Of course it is complex, because of the sums and range of services involved. A superficial study would show that this issue is complicated. However, I believe that this system will prove to be simpler and fairer. If I did not believe that, I would not recommend


it to the House. However, I recommend it, and commend the amendment.

Amendment agreed to.

Amendments made: No. 99, in page 38, line 32, leave out from 'this' to end of page 39, line 8 and insert—

'Part of this Act—
grant-related expenditure", in relation to to each authority to whom block grant is payable for any year, means the aggregate for the year or their notional expenditure having regard to their functions;
grant-related poundage" in relation to each such authority, means a poundage related—

(a) to a given ratio between their total expenditure and their grant-related expenditure; or
(b) to a given difference between their total expenditure divided by their population and their grant-related expenditure so divided;
gross rateable value", in relation to each such authority, means the aggregate of the rateable values of the hereditaments in their area;
rateable values", in relation to hereditaments, means subject to subsection (7) below, rateable values ascribed to them in the valuation lists on a date to be specified for each year in the Rate Support Grant Report;'.

No. 100, in page 39, line 16, at end insert
'and
"valuation list" has the meaning assigned to it by section 115 of the General Rate Act 1967.'.—[Mr. Fox.]

Mr. Deputy Speaker: We come to amendment No. 101, with which it will be convenient to take Government amendments Nos. 103 and 104.

Mr. King: I have already spoken to those amendments. May I move them formally?

Amendments made:

No. 101, in page 39, line 16, at end add—
'(3A) The Secretary of State may—

(a) defray any expenditure incurred in any year in the provision of services for local authorities by any body specified in regulations made by the Secretary of State; and
(b) deduct from the aggregate amount of the block grant for that year, such amount, not exceeding the total of the expenditure so defrayed, as appears to him to be appropriate;
and any regulations made under section 2(7) of the Local Government Act 1974 shall have

effect for the purposes of this subsection as if they had been made under it.'.

No. 103, in page 39, line 17, after 'above', insert
'or exercising his powers under subsection (3A) above'.

No. 104, in page 39, line 22, at end add—
'(5A) Regulations under subsection (3A) above shall be made by statutory instrument, and a statutory instrument containing such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.

No. 105, in page 39, line 26, leave out from 'provide' to end of line 29 and insert
'that for the year to which it relates the rateable values of hereditaments falling within any class of hereditaments shall be ascertained for the purposes of this Part of this Act otherwise than by reference to the values ascribed to them in the valuation list.'.—[Mr. Fox.]

Mr. Squire: I beg to move amendment No. 106, in page 39, line 28, after the words last inserted, insert
'and take account of such factors as differences in levels of rateable values as between local authorities for otherwise comparable properties, or incomes of the people in a local authority area or the level of rate payments in an authority's area or by any method other than that specified in this section'.

Mr. Deputy Speaker: With this, it will be convenient to take the following amendments: No. 108, in clause 46, page 39, line 30, leave out 'standard rate poundage and'.

No. 110, in page 39, line 34, leave out
'the standard rate poundage and'.

No. 111, in page 39, line 35, leave out
'are' and insert 'is'.

No. 112, in page 39, line 36, at end insert—
'(3) And the principles on which the standard rate poundage shall be determined shall be such that—

(a) if an authority's total expenditure exceeds their standard expenditure, that authority shall not receive less grant than they would have done had the difference between their total expenditure and their standard expenditure been smaller;
(b) if an authority's total expenditure is less than their standard expenditure, that authority shall not receive less grant than they would have done had the difference between their total expenditure and their actual expenditure been greater;
(c) for all authorities with the same ratio between total expenditure [per head of population] in their area and their standard expenditure or the same difference between


their said total expenditure and their standard expenditure the ratio of the block grant they would have received if their said total expenditure had equalled their standard expenditure shall be the same.'.

No. 113, in page 39, line 36, at end insert—
'(3) A local authority's standard rate poundage shall be determined in accordance with schedule (Determination of standard rate poundage) to this Act.'.

No. 220, new Schedule,—'Determination of Standard Rate Poundage
1. There shall be specified in relation to each authority to whom block grant is payable a "threshold expenditure.
2. An authority's "threshold expenditure" shall be a figure higher than their standard expenditure and shall either—

(a) bear a given ratio to their standard expenditure or
(b) differ from their standard expenditure by a given amount multiplied by their population.
3. The given ratio or given amount referred to in paragraph 2 shall be the same figure for all authorities.
4. (1) Where an authority's total expenditure is greater than or equal to their standard expenditure, but less than or equal to their threshold expenditure, their standard rate poundage shall be given by the formula
AE+B
where E is either—

(a) the ratio between the authority's total expenditure and their standard expenditure or
(b) the difference between their total expenditure divided by their population and their standard expenditure so divided:
A is a constant, greater than zero, specified in the Rate Support Grant Report;
B is a constant, greater or less than zero, specified in the Rate Support Grant Report.
(2) A and B shall respectively be the same for all authorities to which this paragraph applies.
5. (1) Where an authority's total expenditure is less than or equal to their standard expenditure, their standard rate poundage shall be given by the formula
PE+Q
where E is as defined in paragraph 4(1);
P is a constant, greater than or equal to A in paragraph 4(1), specified in the Rate Support Grant Report
Q is a constant, greater or less than zero, specified in the Rate Support Grant Report.
(2) P and Q shall respectively be the same for all authorities to which this paragraph applies.
6. (1) Where an authority's total expenditure is greater than their threshold expenditure, their standard rate poundage shall be such as may be specified in accordance with principles

to be applied for all authorities to which this paragraph applies.
(2) The principles referred to in sub-paragraph (1) shall be specified in the Rate Support Grant Report.'.

No. 311, new schedule—Determination of Standard Rate Poundage.
1. There shall be specified in relation to each authority to whom block grant is payable a "threshold expenditure.
2. An authority's "threshold expenditure" shall be a figure higher than their standard expenditure and shall either—

(a) bear a given ratio to their standard expenditure; or
(b) differ from their standard expenditure by a given amount multiplied by their population.
3. The given ratio or given amount referred to in paragraph 2 shall be the same figure for each authority within a class of authorities.
4.—(1) Where an authority's total expenditure is less than or equal to their threshold expenditure, their standard rate poundage shall be given by the formula
AE+B
where E is either—

(a) the ratio between the authority's total expenditure and their standard expenditure;or
(b) the difference between their total expenditure divided by their population and their standard expenditure so divided;
A is a constant, greater than zero, specified in the Rate Support Grant Report;
B is a constant, greater or less than zero, specified in the Rate Support Grant Report.
(2) A and B respectively shall be the same for each authority to which this paragraph applies within a class of authorities.'.

Mr. Squire: After one or two false starts, most hon. Members will agree that we have reached the debate that best meets head on the provisions of the block grant. We can now discuss its implications for local authorities. Before looking at the amendment in detail, it is essential to remind those who did not have the privilege of reading or hearing the proceedings in Committee why many of us find the provisions objectionable.
Let us ask some simple questions. Does the provision represent interference in local authorities? As has been indicated, every local authority association—I am glad that at the time they were all controlled by the Conservative Party—made representations to the Government. They pointed out that the provisions were an intolerable invasion. One might have thought that there was less probability of the three local authority associations


agreeing on anything, than there was of achieving an inflation rate of 0 per cent. However, we have now united those associations.
The measure represents a major shift towards central Government. It relies too much on figures that are less than reliable. It introduces positive financial penalties in areas that were previously considered a matter for the council, its ratepayers and electors. I shall not make a detailed use of newspaper quotations. However, it is worth reminding the Government that the Financial Times—not the most Opposition-minded newspaper at the best of times—concluded its editorial entitled "The ratepayer should choose" with the following words:
The Government's intention to penalise local authorities with cuts in their basic grants if they increase rates 'excessively' could reduce local authorities to mere organs of central government. The Government would be right not to contribute to local profligacy with increases in the rate support grant. But it should not deprive local ratepayers of the right to be profligate with their own money. The ballot box, not the Government, should decide whether local Councillors are spending 'too much'.
The measure represents an interference. Is it justified by the performance of local government? The hon. Members for Batley and Morley (Mr. Woolmer) and Bishop Auckland (Mr. Foster) mentioned that the outturn figures—the total amount of local authority expenditure in each of the years from 1975–76 to 1979–80—have been within a very small percentage of the figure agreed with the Government of the day. That figure would have been agreed at the rate support grant negotiations in about November of the year preceding the year in question. In the majority of years, the outturn has been below that figure. The figures are widely available and I am sure that hon. Members have them.
A letter to The Times of 24 June from Professor Jones, pointed out that local government can be compared with national Government over a similar period of time. The Institute of Local Government Studies review for 1980 showed that, based on the Government's expenditure plans for 1980–81 local authority expenditure should be nearly 14 per cent. lower than in 1974–75, at 1979 survey prices. Central Government spending will be nearly 8 per cent. higher.
I am sure that my right hon. Friend the Minister will mention the relevant

figure for the current year. I have every belief that, as in the past, local authorities will demonstrate their desire to keep within the limit set by the Government. However, the figure is partly artificial. It arose in part because central Government chose not to make the cuts they could have made last summer. The Government probably recognised that authorities would have found that difficult. However, as they did not make a cut then, it is difficult to penalise local authorities now. Given the base that the Government have adopted, I have a horrible feeling that many of those councils that have a political complexion similar to mine will be thought of as overspenders.
Is the measure justified on economic grounds? I do not think any hon Members would disagree that central Government are responsible for controlling expenditure. Some of us have wished that central Government would make more effort to control expenditure. No one would wish to take that authority from them. Is it also in order for Government to control local authority expenditure above the rate support grant, namely, that element raised in rates? The difference between the rate support grant and total expenditure does not affect the public sector borrowing requirement. Nor does it affect that lovely phrase "council borrowing".
I should like to reassure those hon. Members who have not been involved in local authorities that councils can borrow only to meet temporary shortfalls in their cash flow. Traditionally, that tends to occur early in the year because there is a delay in receiving the rates. The Local Government Act 1972 specifically prohibits local authorities from borrowing against future rate assessments. We therefore do not want to hear too much talk about great increases in local government borrowing. Any borrowing is raised on capital, which is largely under the control of the Government of the day.
Is there an alternative? The joint submission of the three local authority associations pointed out an alternative. It would have met the Government's stated objectives, as it would have agreed a revised method of measuring need and would have tackled the bits and pieces


that needed changing, including resources. Local authorities should be 100 per cent. accountable to their electors.
Lastly, on the background, I am concerned that the whole of the block grant tends to rely on figures in a way that was never contemplated for those figures. I shall give an example. Surely most hon. Members agree that one of the most vital figures is the population of a local authority. Yet no local authority can tell its exact population. It receives an estimate from the Auditor-General, but often it will challenge that figure—

Mr. Dafydd Wigley: Will the hon. Member agree that a serious problem faces those counties that have influxes of population during the holiday season? In such areas it is impossible to assess the population, yet the services that must be supplied to meet the maximum demand are a disadvantage to the economy of those areas.

Mr. Squire: The hon. Member makes a valid point. I am sure that many hon. Members could think of a number of alternative ways in which that figure could be used or misused.
There is also the question of unemployment figures. We do not know the unemployment figures borough by borough because the catchment area for unemployment consists of the appropriate offices and these overlap over local authority areas. Hon. Members may well think that if one were using various statistics to measure needs, the unemployment figure would be critical.
I turn to amendment No. 106 which refers to clause 45. That clause sets out the basic mechanism of the block grant system. The hon. Member for Rotherham (Mr. Crowther) is not in the Chamber at present, but he made the point earlier that rateable values were not a realistic way of measuring value. The amendment recognises that point. Rateable values are not a good measure of relative resources and were never intended to be used in that way. When it met, the Layfield committee showed how much rateable values for the same standard house varied dramatically across the country. Successive Governments have

recognised this in the context of the existing rate support grant by not fully equalising on the basis of rateable values. With the postponement of rating revaluation, which is also contained in the Bill, we do nothing to increase the relative accuracy of rateable values—indeed, they move even further out of line with reality.
The Minister way well claim that there is sufficient flexibility to enable him to recognise that some adjustments are needed to rateable values before these are used to calculate grant. However, the local authorities would be much more secure if this amendment were accepted, so that alternative measures of resources could be used for grant purposes. It is important to ensure a fair grant distribution and equitable rate burdens between local authority areas.
I must point out the obvious problem of Greater London. I do not do this merely because I represent a Greater London constituency, but because Greater London, more than any other part of the country, highlights the problems of using gross rateable value. In London, domestic rates are more than 45 per cent. higher than the average in the rest of the country for the same sort of property, but Londoners' incomes are only 10 per cent. higher. Those incomes have to cover a range of higher costs, not just rates.
Amendment No. 112 is perhaps the most critical of the amendments in this block. It seeks to tackle what is called negative marginal increments of grants. If hon. Members are feeling a little confused about that, I have bad news for them—it gets even worse. Because of the way in which the Bill is drafted it would be possible to construct schedules of standard rate poundages in such a way that an authority that was spending £X plus 10, as against an authority spending £X plus 5 would lose more than £5 of that expenditure. That is wrong. Above a certain level of expenditure we should seek 100 per cent. accountability. We will not make local authorities more responsible by reducing their responsibilities. But we will make them more likely to be responsible and accountable by making the full effect felt by the ratepayers. I shall leave it to other hon. Members to make that point in greater detail.
For the benefit of my right hon. and hon. Friends I shall quote the "mirror image" here. Suppose that a future Labour Government face a number of Conservative-controlled authorities, each elected on a platform to restrain expenditure, in practice receiving incentive under a grant system of perhaps £7 or £8 to reimburse them for the £5 that they spent. That is the mirror image of what we are discussing tonight. Most of my right hon. and hon. Friends would be concerned with that state of affairs. I ask them to be equally concerned, in the interests of fairness, with the amendment that is in front of us today.
7.15 pm
Finally, the remainder of the amendments—Nos. 108, 110, 111 and 113—are paving amendments for Nos. 220 and 311. I shall speak to the two latter amendments together. This is a very complex matter because block grant itself is very complicated. As the Bill is drafted there is no limitation on the way in which the Secretary of State can construct standard rate poundages in each year's rate support grant settlement. The powers available are so wide that a future Secretary of State could, if he wished, use his new grant system to encourage some authorities to raise their spending to levels desired by the Government of the day. This could be done by reducing the existing grant entitlements of authorities that underspend—that is, they spend below their standard expenditure figures under the Bill—and, in effect, by promising more grant if they increase their spending closer to the standard.
Large numbers of local authorities at present spend below the assessed needs figure used for calculating their needs grant under the existing grant system. These authorities are mostly, but by no means exclusively, in non-metropolitan areas. Under the block grant, the assessed needs of the present system are replaced by standard expenditure figures. The Government have said that they propose a different method of assessing standard expenditure from that which was used for arriving at assessed needs. But whatever method is employed, it is certain that a substantial number of authorities' existing spending levels will be below the new standard of expenditure. Probably many of those will continue to be in non-metropolitan areas.

Such authorities are understandably worried at the prospect of a future Secretary of State labelling them as under-spenders and using the block grant system to reduce their grant. Many such authorities would take the view that their lower spending levels reflected, at least in some cases, financial prudence, economy and efficiency and a standard of services that was not in any way inadequate.
These amendments propose a new schedule which would place limits on a Secretary of State's powers in the standard of setting rate poundages so as to prevent a rate support grant settlement from being constructed in this way. In the case of amendment No. 220 it would impose a requirement for a linear relationship between expenditure and standard rate poundage for all authorities spending below a prescribed thresh-hold, but above their standard expenditure. Secondly, it would prevent the uniform straight-line relationship between expenditure and standard rate poundages for authorities spending below their standard expenditure from giving any greater incentives in terms of extra grants to raise spending and the incentives which apply to the authorities spending just above their standard expenditure levels. Thirdly, it would provide a continuing incentive to restrain the expenditure of authorities spending below their standard level. Therefore, the amendment would build into primary legislation a continuing incentive for efficiency and economy.
Similarly, amendment No. 311 shares many of the same aims, but makes the marginal cost of spending the same for all levels up to the threshold. While the amendment does not meet all the fears of the more prudent authorities, it eliminates any pressure through the grant system for authorities to vary their expenditure if they are spending below the threshold level. The amendments are complicated but it must be realised by hon. Members that the at least annual rate support grant reports to Parliament, for which the Bill provides, will contain much more complicated provisions which Parliament will have to understand.
I am grateful for the tolerance that the House has shown in allowing me to outline these remarkably complicated


matters. I reiterate that local government democracy is not an invisible force, conjured up only over matters of great peril. It is a dynamic factor. Over the years it has been a bulwark against successive Governments perhaps threatening to take excessive centralised control. Given the trust and support of the House this evening, I am sure that it will remain so for many years to come. I am not surprised that a Government should seek to take greater powers. That is in a sense the very stuff of Governments, whatever their political persuasion. However, I should be surprised if the House tonight approved the taking of those greater powers without assuring itself that they were justified and necessary, and, above all, that no alternative existed to meet the requirements.

Mr. Hattersley: I hope that I shall not do the reputation of the hon. Member for Hornchurch (Mr. Squire) irrevocable harm if I congratulate him on the clarity and force of his speech. However, by his grip and grasp of this complicated subject, he may lead his hon. Friends to believe that claims that the new grant system will be simpler than the old are justified. I believe that the new system will be a great deal more difficult. It is arcane, and will be almost incomprehensible not only to the local authorities which have to wrestle with it but to this House when we get the almost formal opportunities to debate what the Secretary of State has decided.
I shall concentrate on amendment No. 112. However, I wish first to deal with the background to the debate. My objection to the block grant is that it brings a permanently coercive element to the distribution of Government funds. No one would argue that there should be an open-ended commitment for the Government to pay local authorities whatever individual and collective local authorities consider that they should. If the Government decide that £9·6 billion is all that they can afford under their economic policies, it is not only their right but their duty to set that limit. However, that £9·6 billion this year, and whatever it is next year, should not be distributed in a way that brings pressure to bear on local authorities to do things which, in their discretion, they would not have done.
The Minister made a brief remark that intimated that we were wrong to suggest that that coercive element exists. He appeared to suggest that local authorities would still be able to raise whatever rates they wanted and spend what they wanted. In theory, that legal right may remain, but the object of the block grant is to bring pressure to bear on what a Secretary of State may regard as a profligate authority. We need not consider now whether such a determination would be correct. The question is whether it is right for the Secretary of State to distribute money in a way that could bring pressure to bear on local authorities not to exercise their traditional and legal rights. That is why we object to the scheme, and is the main reason why local authority associations have objected.
The Minister does those associations less than justice when he suggests that the objection is that no local councillor dare say that he likes the new scheme in case his authority receives rather less than it would have received under the old scheme. I give local authority associations far more credit than that. They have spoken and fought against the scheme as a matter of principle—the principle of local government autonomy. Once elected, a council is responsible to its ratepayers. That responsibility should not be eroded in the way that the Government propose.
I am accused by the Secretary of State constantly, and by the Minister occasionally, of urging local authorities to exercise their rights, raise the rate of their choice and support the spending that they consider right for their areas. I plead guilty. Before the year is over, I shall doubtless be asking for many other charges to be taken into account. However, if the Minister wants local authorities to co-operate, he must place some of the trust in them that he has talked of. Local authorities will not co-operate if they know that, while asking for co-operation, the Government are taking penal powers and will enforce their will. It is in the nature of local authorities that they will ask themselves why they should come to a voluntary agreement on spending if the voluntary agreement will no longer apply and the Government propose to apply coercion through the new Bill. It erodes the possibility of the majority of


local authorities subscribing to the overall financial provisions that the Government believe are right.
The hon. Member for Hornchurch rightly said that we are dealing with complicated matters. Amendment No. 112 is not as simple as it appears. The principle behind it is clear. It is intended to protect local authorities from what is either a crude error in the Bill or a gross injustice, depending on how one judges the Minister's attitudes. When one considers how the block system works, it is clear that it is irrefutably one or the other. The amendment was suggested by the Association of Metropolitan Authorities. It is intended to protect two classes of local authority. The first class comprises those local authorities that will be described as overspenders, although we reject that subjective term, which has no real meaning. Such authorities could be penalised in a Draconian way unless the amendment is carried.
Those authorities that the Secretary of State may regard as underspenders could also be penalised. Without the amendment, it is possible that what is mistakenly described as a negative increment, which is a contradiction in terms—removing money from local authorities because of their extra spending—could be exacted from what the Secretary of State would describe as comparatively prudent authorities, which had the good fortune in general but the misfortune in particular to have high rateable values. Those authorities, which may be Conservative-controlled, will have a long record of spending no more than that which their people, and perhaps even the Government, regard as appropriate, yet they may be penalised simply because of their high rateable values.
To illustrate my points, I fear I shall have to spend a couple of minutes out-lining the principles of block grant once again. As the House knows, it is calculated on a three-part formula. First, there is an assessment of standard expenditure.

Mr. King: Grant-related.

Mr. Hattersley: Standard expenditure is one of those notions that the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) described. It does not happen in a real council in a real world,

but it is a notion that the Secretary of State was required to construct. It is to be a replacement for or an adaptation of what used to be called the needs assessment. Crudely but accurately put, it becomes a statement of what it is popularly supposed the council's level of spending should be. The Minister will tell us that that is wrong. I have learnt to know if not love him. He will invent a new name, such as an "indicative total". However, when the citizens of Birmingham discover there is a figure for standard expenditure that the Government apply to Birmingham, they will consider that that is what Birmingham ought to spend, as has been adjudged by the Secretary of State. Birmingham may be spending more or less than that. Either way, the citizens of the city will say that Birmingham is spending too little or too much. It is not possible for the Secretary of State to produce a figure of spending for local authorities without its being so taken. Indeed, unless it is so taken it will make nonsense of the entire formula.
7.30 pm
The second part of the formula concerns the sum that a council might reasonably raise through rates—a combination of what is called the standard rate poundage, another wholly imaginary figure concocted from the Marsham Street air, multiplied by the gross rateable value. The Government will take what they believe the council should reasonably raise from what they believe the council ought to spend and will make up the difference.
In passing, may I say that one of the provisions in the Bill to which we take particular exception is that those two notional sums—standard rate poundage and standard expenditure—will be concocted by the Secretary of State in whatever way he wishes. The Bill is beautifully simple in that regard. It says that standard rate poundage and standard expenditure
shall be determined by the Secretary of State in accordance with principles to be applied to all local authorities.
That is the only check on the Secretary of State. He can decide what he believes the poundage should be and what he believes the expenditure should be.
The Secretary of State will sophisticate the system slightly by applying a


number of weird devices, one of which glories in the Keynesian title of multiplier. When we told the Minister in Committee that it was a Keynesian title, he was frightened that he would be regarded as one of those who actually believe that the Government should bring down unemployment. A multiplier is to be used to sophisticate the entire scheme and to make it more complex and more incomprehensible.
Basically, there are three elements—what the Government think councils should spend, what the Government think councils should raise, and the difference, which, initially, the Government will make up. I understand that the Government will make up 100 per cent. of the difference as long as councils spend what the Government think right and as long as they raise what the Government think right. If a council exercises its free right, which the Minister says is not to be undermined or inhibited, to spend more than the Government think right, or exercise their right to raise rates higher than the Government think right, the penalties will start.
The first penalty is that a council will receive a smaller proportion of the additional expenditure than of the primary expenditure. I understand that. If a local authority spends more than the Government lay down, the Government will say that they are not responsible for paying their share of the extra expenditure. I understand why the Government say that the more that a council exceeds the notional total, the less contribution they will make towards the excess. I do not approve of such a scheme, but I understand it. I assume that the Government would go on making a diminishing contribution to extra spending until they were making no contribution.
Imagine our surprise, Mr. Deputy Speaker, when we discovered in Committee that the Government may go on diminishing their contribution towards extra expenditure to a point where their contribution is negative so that they take money away from the original sum that they proposed to give to councils. A council that spends, say, £10 million more than its original intention will receive a smaller grant than if it had not spent the excess £10 million. Clearly

that is coercive and the intention is to deter extra expenditure. By any normal definition of the term, that is a fine imposed on a council. The Government are saying "Raise rates that are high enough to finance expenditure of which we disapprove and we shall positively take money from you."
The entire concept of a negative increment is as nonsensical as it sounds. It is all the more nonsensical when the negative increment can apply to councils that are comparatively low spenders. Since the formula has within it the gross rateable value, a number of authorities believe—and calculations carried out by the AMA confirm their belief—that because of the money that they receive from highly rated properties they will have to go only a few pence above what is at present a modest level of expenditure to be penalised by the negative increment.
I hope that the Minister will make clear that unless the negative increment is amended as we propose, not only will it apply to authorities that the Secretary of State regards as overspenders, but local authorities that are well down the table of spending may discover that their second assessment for rate support grant is smaller than their first and that they are being penalised as though they were overspenders.
That is such a bizarre proposition that I understand why some hon. Members find it difficult to believe that the Government have got themselves into such confusion. However, I assure the House that many Conservative-controlled authorities are worried about facing that penalty. The Minister confirmed in Committee that it could happen and I hope that he will tell us how he proposes to avoid it. We believe that this sort of nonsense is inherent in the block grant suggested by the Minister.
It seems to us absurd that Marsham Street—I shall define that in a moment—should try to assess what is the appropriate spending for 400 or 450 local authorities. I said "Marsham Street", because, while the statute will say that the Secretary of State shall determine what is the indicative total for expenditure, I do not believe that the right hon. Gentleman, whose devotion to detail is not notable, will work it out for himself. It will be worked out by civil servants.
The idea that civil servants are to lay down the indicative total of what ought to be spent in Birmingham on all the services—parks, education, housing and so on—is a negation not only of democracy but of common sense. It is "the gentlemen in Whitehall know best" with a vengeance. To start on the basis that that sort of calculation should be made by civil servants is an indication of the absurdities of the entire scheme.

Mr. Wigley: Does the right hon. Gentleman agree that the only way that that could be done in practice would be to bring in a horrible system of prefects in each area to keep an eye on what was going on? Would that not be an unacceptable addition to bureaucracy and expenditure?

Mr. Hattersley: I agree. There are two problems. If the prefects—I take it that the hon. Gentleman uses the word in the French sense rather than in the Shrewsbury school sense—are to do their job adequately, it will be a negation of democracy. My fear is that there will not be prefects and that it will all be cobbled together during April. People will say "Give or take a few hundred thousand pounds, it does not really matter, because the people of Birmingham can find their way through the gap in resources. "It will be done haphazardly and incompetently. Both the negation of democracy and the incompetence ought to give us cause for concern.
It is equally absurd that, by a number of hypotheses and a number of notional figures, the gentlemen in Marsham Street who are deciding what should be spent in Birmingham or any other city will also claim the right to determine what the rates should be. That is what it amounts to. If the two elements do not fit together, an authority is likely to receive a reduced grant which will influence its behaviour and general performance.
I hope that the Minister will tell us that he will modify the most absurd aspects of the scheme. I fear that he will not be able to make the block grant acceptable, because, by its nature, the block grant is supposed to interfere in local authority matters that the Government should not interfere in.
I suspect that the Minister will tell us that the Government have to find

some way of determining what a local authority's level of expenditure should be. I suspect that he will repeat all the well-known criticisms of the present method of determining the needs element—its historical inadequacy, the fact that it requires the largest grant to go to the largest spender and so on. I accept some of those criticisms, but the test that what a council, having been elected, thought was right for its area and what it convinced the electorate to vote for the council to do is not a bad test of what ought to be spent in the area. It is giving the local ratepayer the chance to influence his local council and its decisions.
The Minister does not agree with that view. He prefers the idea that by a permanent system he should have the opportunity to bully and blackmail local authorities into spending levels that are determined in Whitehall. I do not know of anyone who suggests that the Government should provide funds to meet all the bills that all local authorities want to incur. No one suggests that there is a bottomless purse from which the Government should or can contribute.
What we resent about the block grant is that if it passes into law it will force on councils spending patterns that they do not believe to be in the interests of their areas. It will prevent councils from raising rates that their ratepayers are prepared to pay. As a result, it will mean a substantial reduction in the autonomous powers of local government. The Minister of State must accept, as I accept, that if one believes in local government autonomy—he has said several times, even today, that he does—that autonomy must include the right of individual authorities to do things that the Government do not approve of their doing. Autonomy is nonsense if it is only the right to do what the Secretary of State of the day approves.

Mr. King: I have already answered that point.

Mr. Hattersley: The Minister of State says that he has already answered that point. He has not answered it to anyone's satisfaction, as shown by the recent Division. He may like to have another shot if he intends to intervene during the debate. The idea that, by asserting that he is on the side of the local authorities,


anyone should believe that he is on the side of the local authorities when he is proposing to penalise and bully them in this way is to stretch our credulity too far. It is right that some decisions should be taken locally. A council should be able to raise the rate of its own choice without being penalised if that rate is higher than the Government believe correct. If councils are prepared to finance their own spending, they ought to be allowed to maintain such spending. We shall divide against the clauses that enshrine the block grant.

Mr. Geoffrey Rippon: The House must be grateful to my hon. Friend the Member for Hornchurch (Mr. Squire) for the clear and concise way in which he has put forward this important group of amendments.
My right hon. Friend the Secretary of State wrote to me on 1 April assuring me that while the Government were determined to proceed with the basic principles of the block grant, he recognised, nevertheless, the genuine local authority concern about possible implications of what he termed the theoretical way in which block grant might be operated. He reasserted the undertaking given by my right hon. Friend the Minister for Local Government and Environmental Services in Committee on 25 March when he said:
I confirm that the Government are certainly prepared to consider further constructive amendments that could incorporate any additional safeguards"—[Official Report, Standing Committee D, 25 March 1980; col. 757.]
In my submission, my hon. Friend has tabled amendments which seek to obtain that very object. If, tonight, the Government feel unable to accept these amendments in the precise form in which they are drafted—an argument frequently put forward, no doubt, with good reason—I hope that my right hon. Friend would at least give a very firm assurance that further consultation will take place with the local authority associations in order that there can be agreed amendments in another place.
It is essential that, in such a complex matter, a real effort should be made to get agreement where there is acceptance, to a large extent, of the Government's objective. I have seen the letter that the Minister for Local Government and Environmental Services wrote on 20 June to

the chairman of the Association of County Councils. I am bound to say that I share the view, expressed not only by the Association of County Councils but by the other associations, that the Government have not yet made any concession, apart from the matter of terminology. To change the phrases "standard expenditure" and "standard rate poundage" to "grant related expenditure" and "grant related poundage" does not, in itself, amount to what I would regard as a major concession. I doubt whether the change to which my right hon. Friend has referred in the use of the concept of multiplier will take us much further forward in meeting the fundamental objections to the block grant of the sort to which my hon. Friend and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) had referred.
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There is a genuine anxiety that the Bill is so drafted as to give any Secretary of State powers that, by any standard, are too wide. I can only join those who, while not opposed to the Government's stated objectives, are begging them to think again about such doubtful concepts as the negative increment.
I agree with my right hon. Friend that no one regards the present system of the rate support grant as being ideal. It would be fair to say that, on both sides of the House, those concerned for many years with local government are anxious to try to find the fairest system of distributing the global grant, taking into account the wide variety of considerations affecting the different types of authority, such as the extra expenditure that falls upon an authority because of the sparsity or density of the population and the whole range of different problems that face urban and rural areas.
The criticism of the present financial provisions of the Bill centres on the fact that the existing Government rate support grant, for all its weaknesses, is, as far as anyone can judge, preferable to the proposed new block grant system. It is as simple as that. I accept my share of collective responsibility for those present weaknesses. I can say, in some mitigation, that when I introduced the Local Government Bill on 12 November 1973 I stated:
Certainly it is not the last word to be said on the subject. But I hope to show the


House that it represents a major advance, paving the way for future developments. This is based on the principle that the right financial framework is one in which central and local government can work as partners, each representing its proper responsibilities with the minimum of overlap and potential conflict."—[Official Report, 12 November 1973; Vol. 864, c. 35.]
What is so worrying about the present Bill is that this principle is so clearly breached. There are all the elements of potential conflict that one can imagine. If we accept the need for reform, I beg the Government to try to make another effort to get it right in a more acceptable way. Anyone listening to the discussions today, whether my right hon. Friend is right or not in saying that it does not have the damaging effects that some people argue, will be clear that the Government's proposals are not acceptable over the whole range of authorities of every kind, including officers and members. In my area, the Northumberland county council and all the district councils are unanimous in their opposition to these financial provisions, although they would claim to be numbered among the prudent authorities that might be expected to benefit most from some effort to restrain the so-called extravagant authorities.
The objections to the block grant have been admirably summarised by the Association of District Councils, which says that it will, first, result in a major shift in the balance of central-local relationships and substantially reduce the autonomy of local authorities; secondly, that the new system will be more complicated and difficult to understand than the existing rate support grant system—difficult thought it may be for anyone to believe that this is possible and, thirdly, that it will result in greater uncertainty and instability than the present system. That is pretty severe condemnation. It summarises the general view throughout local government.
It is not only the local associations that criticise the provisions. The City is also critical. At a seminar organised recently by Short Loan and Mortgage Co. Ltd., which specialises in this field. I noted that the managing director of Morgan Grenfell (Local Authority Service) Ltd., Mr. Richard Scriven, described the Bill as "appalling". I am

bound to say that I endorse the plea made only on 3 July by the all-party Association of Councillors, which said:
We hope that even at this late stage you will feel able to make some gesture to convince local government that the proposals are not a retrograde step as far as the autonomy of local government is concerned.
Whatever the rights or wrongs, it is certain that the message, such as it is, has not got across. Nobody is convinced that the Bill will not have adverse effects over a wide range. When the Secretary of State addressed the annual conference of the Society of Local Authority Chief Executives on 18 July 1979, he said:
I believe that an effectively functioning local democracy can monitor the activities of local councils far better than the civil servants in Marsham Street.
That is exactly the point that the right hon. Member for Sparkbrook made. That is why I believe that the provisions will prove to be unworkable. It is not possible, without an enormous addition to the staff at Marsham Street and in the local authorities, to determine the needs of each local authority in the way that the effective operation of the new system requires.
The chairman of Northumberland county council, Colonel Barnett, commenting to me on the Secretary of State's speech on 18 July 1979, said:
Now, with the introduction of this new Bill, he"—
that is, the Secretary of State—
seems to have done a complete U-turn and is seeking to give to civil servants a savage and, to my mind, completely unnecessary grip over both capital and revenue expenditure by local government.
I can assure the Secretary of State that the chairman of the Northumberland county council is a mild man. It is rare for the county council to call upon me in such clear tones to express its unanimous view.
I do not ask the Government to do another U-turn. That expression, which is now so fashionable, is rather misleading. The Gadarene swine were not required to turn round and go in another direction back to whence they came. They needed only to change direction and go along the precipice instead of jumping over it.
"The Right Approach", published in October 1976—a document to which I


attach a great deal of importance—stated:
Within a total budget, local government should have much greater freedom over how it spends its money. Priorities should be worked out locally.
It has been said that we might have been misled by the preamble into believing that the Bill is intended to remove rather than to add controls. However, I believe that the proposals breach a basic tenet of Conservative Party philosophy. The Government have stated that their strategy is to give
more freedom to local authorities, more responsibility and less control within a realistic economic framework.
In pursuit of that admirable objective, they have declared that:
what central Government can do is to set a ceiling to spending which matches the state of the national economy. But it is for councillors and ratepayers to see that their own controls work and to see that they are guided by the values of the real world.
Hon. Members who have not studied the Bill might be forgiven if they are under the mistaken belief that it conforms with those admirable principles. It does not.
We cannot effectively manage our national affairs without delegating a large measure of power and responsibility to local authorities. As the right hon. Member for Sparkbrook said, that is not contrary to the Government's responsibility to control the total expenditure in the public sector. It must determine the general level of Government grant to local authorities. They should not, and cannot in practice, impose a rigid control on the spending pattern of the individual local authorities because the spending pattern inevitably varies, for all types of reasons, from area to area.
My Hon. Friend the Member for Hornchurch rightly said that this amendments would have no effect on the public sector borrowing requirement, about which monetarists and others are so much concerned. The grant itself forms part of the PSBR, but it is fixed in advance, together with the cash limits, by the Government. The Government exercise the control. The total amount is firmly within the Government's control. That £9·6 billion is determined by the Government—that is out of total local government expenditure of £17·5 billion.

The Government could properly reduce their percentage share of local government expenditure by reducing their contribution from the present 61 per cent. to 60 per cent. That might be argued about, but it is a more proper and effective way of controlling public expenditure.
The central Government grant and subsidy contribution to all local authorities in the London area in 1977 was about £1,609 million. In 1979–80, it was £2,230 million. I have no doubt that it will rise again in 1980–81. If the Government want to control local government expenditure where they think that it is excessive, they have the power to do so without this legislation. What is certain is that the local rate level has no effect on the public sector borrowing requirement.
We have had some discussion about whether the proposals will seriously damage the present democratic freedom of all local authorities. The Minister says that it will not. He must accept that all the local authorities say that it will. That certainly applies to local authorities in my area. The Conservative leader of the Northumberland county council, Mr. John Baxter, said:
Northumberland is particularly concerned, as one of the vast majority of local authorities which has consistently observed the guidelines issued by Governments of all political parties.
We should recognise the contribution that local authorities have made to supporting whatever is the policy of the Government of the day. They have not always liked it and they have not always been silent in their criticism, but they have carried out their obligations as part of the machinery of government. As my hon. Friend the Member for Hornchurch said, they have a far better record in recent years than central Government. That is proved by figures issued by the Institute of Local Studies in its annual review.
I have always believed that we should stand firmly for local self-government without any half measures. That often means abandoning the present passion for national uniformity that so often makes vain the hope of progress. If electors are dissatisfied with the conduct of local affairs, the remedy is in their hands. They should be encouraged to use it.
I am afraid that, by preventing variety of decision and standards of administration, we shall undermine the quality of life everywhere. That applies to almost every sphere of government. The tendency is to replace individual initiative and diversity of action with a monolithic process of central planning. We cannot have the freedoms that suit the Government and let the rest go hang. In a free society we must accept both the challenges and the risks. They are the same challenges and risks that give a quality and diversity to life that no paternalistic bureaucracy, however well intentioned the Ministers of the day might be, can hope to achieve.
I believe that my view is shared by many Opposition Members, by many of my hon. Friends and widely outside the House—that the Bill and its financial provisions in particular are a complex irrelevance and that as they stand they constitute a threat to local democracy.
If the Government are not prepared to do as the local authority associations wish—that is, to withdraw the whole of part VI of the Bill—I think that they should, as I said at the outset, give a firm undertaking that they are prepared to introduce amendments of their own when the Bill is considered in another place.

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Mr. Foster: I am glad that I am following the right hon. and learned Member for Hexham (Mr. Rippon), particularly in view of his long experience in these matters. When he had responsibility for these affairs no doubt my right hon. and hon. Friends did not always agree with what he said and did, but at least they knew that he had the interests of local government at heart. He understood local government services and he had the greatest sympathy with what local government tried to achieve.
The difficulty now is that the local authority associations—and it takes a particularly clever Government to have united them in this way—do not trust the people responsible for these matters. The Minister has spoken about the autonomy of local government and about partnership. To many of us it seems that he has learnt the words appropriate to the relationship between central and local government, but we doubt whether he understands the spirit behind those words. That doubt is shared by the

local authority associations which are united in saying that the Government are fundamentally altering the balance of that relationship.
The Minister denies that; and I have no doubt that he is sincere. He says that all that is at stake is that the local authority associations and the officers and elected representatives in local government are afraid of change. But the Minister must be aware that local authorities are used to coping with change. They experience continual changes of government and within that sphere of change they have to cope with changes of Ministers. They experience changes of control in their own authorities. Local authorities are coping with change every day of the week.
We are talking about extremely able county treasurers for the most part. They have formulated the advice about which many people have spoken in the debate. They are the men who understand the system very thoroughly, even though some of us may not. As many hon. Members have said, it is an extremely complicated system. The officers understand the system and they are now saying that they are extremely fearful that the relationship between central and local government is being fundamentally altered.
It could be that, had trust been established earlier, they would have been prepared to give much more credit to the words and intentions of the Government. But the Government having forfeited that trust by some extravagant statements about the role of local government—which many of us hold in great regard and in which many of us have served as councillors and officers—and those officers knowing that local government is often the whipping boy of central Government, it is not surprising that they are suspicious of central Government of whatever political complexion. 
The men of Marsham Street are being quoted in the town halls and county halls as being greatly to be feared. That is because many members and officers of local authorities suspect that in this Bill the Government, in the interests of short-term expediencies, are grasping at the evil designs of the men of Marsham Street in order to gain much greater control over local government. The Government have fallen into the trap into


which civil servants always wish those Ministers responsible for local government to fall.
Whereas the Government have said that it is their intention to allow local government to do away with a host of regulations and controls to enable members and officers better to respond to the needs of their areas, this Bill will excessively restrict that freedom.
It would not be surprising if there were not many ways in which central Government could control local authorities. They do it through the voting of money in this place; through the rate support grant, and through the framework of law passed by this House. It is also done through countless circulars, guidelines and administrative memoranda. What, therefore, is the need for extra power to be in the hands of the Secretary of State or the civil servants to control further what goes on at local level?
I agree with the right hon. and learned Member for Hexham who spoke about the essential relationship between central and local government, because the strength and autonomy of local authorities has been a great bulwark of democracy in this country. Of course it is inconvenient for Secretaries of State to have to deal with what might be seen as a lot of rogue animals persistently being obstructive and attempting to frustrate their honourable intentions. But that is part of the complex system of checks and balances in democracy in this country and I would regret its passing very much.
There is another aspect of this legislation which I also regret. There are already too many tendencies towards uniformity. There are tremendous pressures upon every local authority—upon officers and chairmen of committees—to have regard to national norms; and the vested interest in education, whose services account for about 50 per cent. of local government expenditure, will persistently remind chairmen of education committees and directors of education of how far beneath the national norms their authorities are and that it would be a good thing if they reached the average pupil/teacher ratio. They ask if it would not be a good thing to spend as much upon books as other leading authorities.
That is right and proper, of course, but if we are to have local government

which is really sensitive and responsive to the needs of a local area we need to expand the area within which councils can respond to those needs. We should not restrict it even further.
It is remarkable that the local authorities are universally opposed to part VI, especially to the wide-ranging powers given to the Secretary of State to set standard expenditure, rate poundages and multipliers for individual authorities. Despite the intention of the Government, the authorities feel very strongly that these will be interpreted as what individual authorities ought to be spending, and the rates that individual authorities ought to be levying.
The councils in my own constituency —the Durham county council, the Wear Valley district council and the Sedgefield district council—all agreed with the objections of the Association of Metropolitan Authorities. First, the association feels that central Government cannot possibly objectively assess the needs of each individual area. Secondly, it feels that it is not the function of central Government to assess need in that way. That is the job of local government, as accountable to its local electorate. Thirdly, it is felt that the Bill will result in a major shift in the balance of the relationship which was referred to earlier. Fourthly, the AMA feels that the block grant system will be more complicated and difficult to understand than the existing rate support grant system. One of the Government's objectives was to make the system more simple and readily understandable by councillors and by the people at large, yet the AMA feels that it is even more complex than the present arrangements. Fifthly, it is felt that the new system will result in greater uncertainty and instability than the existing system.
As the hon. Member for Hornchurch (Mr. Squire) said, it is even felt that the system could lead to an increase in the level of local government expenditure.

Mr. Leadbitter: Perhaps my hon. Friend would add a final point to his interesting list. Is he aware that the Secretary of State ought to take into account the fact that in the area which we serve and in which we live—indeed, in a number of depressed areas—local authorities are the pace setters for services and projects with regard to employment-related schemes? Surely it would be a


tragedy if the fears of local authorities in those areas were such that any of those schemes, at this difficult stage in the economy, were withdrawn or even modified.

Mr. Foster: I am grateful to my hon. Friend for his intervention. I myself belong to a local authority—the metropolitan county of Tyne and Wear—whose major objective was to assist in the industrial development of the whole of that county. Indeed, I was chairman of the economic development committee which decided to spend £2 million a year on building nursery factories which would be particularly suitable for occupation by small businesses. There are many authorities up and down the land which are now realising that they have a responsibility, as well as an opportunity, to intervene in order to assist industrial development. As the rate of unemployment rises alarmingly, and as areas such as mine and that of my hon. Friend the Member for Hartlepool (Mr. Lead bitter) will

expect to suffer disproportionately, it is small wonder that local councils want to do more in that respect. One would want to give them the freedom to do more, especially as central Government are cutting back by one-third on their assistance to the regions.
We may well be defining now the nature of the relationship between central and local government for the next 20 years. It has been a long time since that relationship was established. It could well be that it will be an equally long time before we again have the opportunity to change it. It is wrong for central Government to alter the nature of that relationship because of the short-term and self-imposed task of tightening their already vice-like grip on local authority expenditure, in particular by penalising a few so-called profligate, high spending authorities which find the Secretary of State's desire to show his virility no reason for them to impose hardship and suffering on the most needy in their areas.

Mr. Charles Morrison: When I spoke on Second Reading I expressed sympathy with the Government in that they proposed to introduce a new block grant system aimed at overcoming all the criticisms of the rate support grant which local authorities had aimed at that system because of the profligacy and selfishness of a small number of local authorities. Yet, having introduced a new system, the Government were immediately subject to great criticism.
In the light of the criticism made by local authorities, I suggested that in the months ahead the Government should either persuade the local authorities that the block grant system was the better system or that they had to accept alternative suggestions which might be put forward by the local authorities, and that if no reasonable alternative was available it would be better to continue with the rate support grant. I am afraid that the criticisms aimed at the block grant sytem when originally introduced still exist, and that my right hon. Friends have been unable to persuade the local authorities of the benefits of the system which they are now proposing.
I want to be brief. All that I wish to do is to reinforce some of the comments that have already been made so well by my hon. Friend the Member for Hornchurch (Mr. Squire). It is remarkable that all the local authority associations are united in their opposition to the block grant. I cannot imagine any other occasion when that has been so. What is more, they agree about the reasons for criticising the system.
My right hon. and learned Friend the Member for Hexham (Mr. Rippon) quoted the views of the Association of District Councils. The views of the Association of County Councils are very similar. That association is convinced that the block grant will increase the power of central Departments to influence local spending decisions to the detriment of true local democracy. I do not agree with the hon. Member for Liverpool, Edge Hill (Mr. Alton), who said that the block grant would mean an end of local government autonomy. However, I feel that it will amount to a con-

siderable diminution of the authority of local government.
The Association of County Councils points out that the proposals are so complicated that only a few experts will understand the system. Yet, as I understand it, one of the original objectives was to introduce a system which was a good deal simpler than the rate support grant which currently exists. Having listened on a number of occasions to a number of people trying to describe the detailed complexities of that system, I can see that it is easy to understand why there should be a simplier system of grant.
The block grant does not live up to that requirement. It is stated that the complexity of the block grant will make it extremely difficult to forecast, at the time of rate support grant settlements, either the effect of the settlements in total on local authority spending and rates, or the effect on individual authorities. If that is so—and it is an important criticism—it will make it extremely difficult for local authorities accurately to gauge the level of rate poundage that they require at the beginning of the year. It is claimed that the block grant will put all local authorities in a state of great financial uncertainty to the detriment of efficient planning and management of local government important services.
Reference has been made to the fact that my right hon. Friend the Secretary of State undertook to consider carefully any alternative suggestions put to him by local authority associations. Proposals were put to him, and it is believed that those proposals lived up to the objectives given by my right hon. Friend to the House. I understand that the Government do not deny that the proposals put forward by the associations meet the requirements, or live up to the objectives, given by my right hon. Friend. It would be helpful if, when he replies, my right hon. Friend the Minister, would refer to the reasons why he felt unable to accept the proposals of the local authority associations.

Mr. King: We have accepted some of their proposals. We offered to accept others, but pointed out certain complications which might not have been


apparent to the local authority associations, which then decided not to pursue their proposals in the light of the points that we made. I think that my hon. Friend will find that, contrary to the impression that may have been given earlier, we have accepted rather more proposals than are apparent.

Mr. Morrison: Given the complete and total opposition that still exists to the block grant in principle, I hope strongly that my right hon. Friend will be able to accept the amendments proposed by my hon. Friend the Member for Hornchurch. If my hon. Friend will forgive me for saying so, that would be only second best, but at least it would meet some of the major criticisms and worries of local authority associations. The complexity of the amendments proposed by my hon. Friend emphasises clearly the extraordinary complications of the new block grant system. Nevertheless, if we are to have that system it must be amended to take account of some of the worst worries that have been expressed about it.
For me, the objective of the local government reorganisation which began on 1 April 1974 was to produce a structure and system of local government that would prevent the constant filching of local government power by central Government, and to provide a reinvigorated local government to take back some of the powers and responsibilities that it had lost. That has not happened. Far from regaining power and discretion, local government has continued to lose them. Those who serve in local government are, unfortunately, only too often treated as naughty children. In consequence, the atmosphere between central Government and local government is not good, and there is a good deal of suspicion in local government of the motives of Whitehall.
I accept and believe that my right hon. Friend wants a viable system of local government with reasonable freedom and power. But there will not be such a system if, at regular intervals, and at the whim of successive Governments, the power of local authorities is increasingly circumscribed or reduced. It is past the time when the process of filching power by Whitehall should be reversed. If it is not reversed, there will not be any local government that is worth its name.

Mr. Wigley: The Secretary of State and the Minister must be impressed by the representations from all parts of the House. In addition to those representations, all local authority associations and local authorities of different complexions are united in their opposition to the block grant proposal. I would have thought that the Ministers would have been worried by the position. As yet, we have not heard a word from the Conservative Benches in enthusiastic support for the Government's proposals. We have heard criticisms and suggestions for improvements from the Conservative Benches, and criticisms from the Opposition Benches.
The Government can be certain that some Conservative Members, although they will go through the Government Lobby, will not be in agreement with their proposals. The Government may be worried at the thought that some hon. Members will go through the Opposition Lobby who are not in total opposition to their proposals. For those who are centralists—whether centralists of the Right or the Left—the provision gives tremendous scope for additional powers of the Centre. The Government are opening the door through these provisions. That door could be used by future Governments in a way that they and their friends would be surprised and shocked to see, namely, greater centralisation for other purposes.
Over the past 30, 40 and 50 years we have seen an erosion of the powers of local government and the realms of its activities. Since the 1930s we have seen such powers as those relating to trunk roads. hospitals, personal health services, school health, ambulances, electricity and gas services, rivers and, to a large extent, control of the police force, taken away from local authorities.
It now appears that there is to be a further erosion of power for the overwhelming majority of those involved in local government.
If the Government's formula is intended to simplify the position, it is not seen as doing so by those involved in local government. I am lucky in my local authority, which has one of the six elected people in Britain who understand the regression formula used in the present structure. There is no doubt that it is extremely concerned with the way that


the new system will operate. It is concerned that the present system does not operate successfully and accurately, and that some of its weaknesses may become even more compounded in the system that is being advocated.
I put it to the Minister that conceptually he and his colleagues have introduced a set of proposals that are inherently unacceptable. There is an attempt to arrive at some sort of an idea of what is a standard service, viewed from the centre, but circumstances vary so very greatly from area to area that it is very difficult to express this in financial terms.
My county, for example, has a very scattered population. Indeed, it is a county that has argued for super-sparsity to be built into the rate support grant settlement. The problem of maintaining second-class and third-class roads in rural areas puts a tremendous strain on the services. It is a county in which there is a very high average age. Young people are moving out; older people are moving in on retirement. There is a tremendous strain on the social services and an additional requirement of funds for those services. In an area in which the population is scattered, the size of schools and the size of forms within the schools will be very small. An additional strain is put on the education services.
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The cost of maintaining what may be a standard service will vary considerably from area to area. It can be very high indeed in rural areas such as I have described. It can also be very high, for different reasons, in urban areas. It is very difficult, if not impossible, for there to be a uniform assessment from the centre that is meaningful unless there is a system of monitoring and analysis that is so strict as to become not only expensive but bureaucratic and surely unacceptable to the present Government. We could, I suppose, have a system akin to the French prefect system, but I should have thought that would not be acceptable, with our structures.
On the one hand, therefore, there is the impossibility of having a uniform analysis

and a uniform cost of providing anything like uniform services. On the other hand, there is a perfectly reasonable diversity in the ambitions that people have from area to area. I should have thought that the Government would accept that this is so. The people in some areas may want to spend more on certain services; the people in other areas may want to spend less on those services. That is reflected in the political balance that we have in this Chamber from area to area within Wales, England and Scotland.
It is absolutely fair and reasonable that people in different areas should want to spend more and, by spending more, get more services in the public sector, whereas people in other areas want to spend less and have less supply in the public sector. That is the whole rationale of local government—that it is possible to have flexibility from area to area in order to meet the differing standards for which people are looking.
We have two problems. There is the problem of being able to assess what a standard should be in any area and what is acceptable. Secondly, we have the reality that people want different standards from area to area. Yet the whole proposal that is before us in the Bill is one that ignores those two factors. I believe that these provisions, when enacted, will lead to a greater alienation between local government and central Government. Local government will be looking for ways of beating the system and will be in operation against central Government instead of looking after its own domain in a totally free atmosphere, within the confines of its own responsibility to its electorate.
For these reasons, I believe that it behoves the Government to think very seriously again about these proposals. They will lead to conflict, to greater cost and to greater bureaucracy. I do not think that they will deliver the goods for which the Government are looking. The Government would be wise, even at this late stage, to accept that there is, perhaps a majority view outside this Chamber in all parties that the proposals should not be enacted. Now is the time—not in a year or two—to make changes, before it is too late.

Mr. Paul Dean: I support my hon. Friend the Member for


Hornchurch (Mr. Squire) in what I believe were very powerful arguments that he used in introducing the amendments.
Last week, on the first day of Report stage, I expressed some misgivings about part III of the Bill, relating to direct labour organisations. On that occasion, the Government went a considerable way to meet the views and the misgivings which had been expressed by the local authority associations and by hon. Members on each side in the debate. There was a firm commitment from the Government that a further amendment would he introduced when the Bill reached another place. I hope that my right hon. Friend the Minister for Local Government and Environmental Services will be able to be similarly forthcoming tonight.
I do not propose at this hour, after a long debate, to repeat the arguments that have been used already, nor am I qualified to go into detail on this matter. However, I should like to make one or two general points.
It has not been argued in this debate, and it is certainly not argued on this side of the House, that the Government should have firmer control than has existed hitherto over the totality of local government expenditure. That was one of the main planks in the platform on which the Conservative Party fought the general election last year. I would not dispute that for one moment. Indeed, we are dealing with a substantial proportion of public expenditure and taxpayers' money, and it is therefore right that the Government should seek a more effective instrument than has existed in the past to control that totality.
I am bound to return to the misgivings that are still expressed, and are deeply held by all the local authority associations, including those that are controlled by the Conservatives, and those councils throughout the country that are loyal to the policy of the Government, and wish to see the Government succeed. My right hon. Friend the Minister for Local Government and Environmental Services said earlier that he fully understood the fears of the local authority associations at the beginning of this process. But he would be the first to recognise that those misgivings still exist with regard to the block grant system. I have a letter from the Association of

District Councils dated 26 June. That was after the various discussions and negotiations that had taken place. One of its criticisms is that in its view there is a probability that there will be an increase in local government expenditure, rather than a decrease, as a result of these proposals. I am not qualified to know whether that is likely to be the case, but it is a criticism, and I hope that my right hon. Friend will be able to deal with it in his reply.
There is another reason why the Government's present proposals are being so strongly criticised. In many areas of local expenditure there is already very little control by the local authorities—for example, in teachers' salaries or almost any other salaries that are involved. Some of the expenditure is borne by the rates, but the decisions are not made by the local authorities. They are made by some central machinery. That is another factor that partly explains the misgivings that still exist.
My hon. Friend the Member for Devizes (Mr. Morrison) asked the Secretary of State to deal more fully with the reasons why the Government do not feel able to adopt many of the suggestions. I admit that they have adopted some, but they are largely technical suggestions. rather than suggestions of substance. I hope that my right hon. Friend will deal with that matter more fully because, having listened to the views of the local authority associations and having discussed the matter with my local authorities—all of which are Conservativecontrolled—I feel that we are better with the devil we know—in spite of the considerable disadvantages that exist in it—that with the rate support grant system.
I hope also that my right hon. Friend will be able to go some way towards meeting the suggestions made by my right hon. and learned Friend the Member for Hexham (Mr. Rippon), who made a plea for further consultation. It is reasonably clear that it will be some time before the Bill is fully considered in another place, so there should be time for further consultation.
No one can say whether the Government, with their faith in the new system, are likely to be right or whether the fears expressed by the local authority associations are likely to be right. We are dealing with a highly complex matter and


there is just the chance that the local authority associations are right and the Government are wrong. That is another good reason for further consultation.
Finally, any system introduced with the present atmosphere of mistrust and misgivings about it among Conservative-controlled councils gets off to a very bad start. Therefore, I hope that my right hon. Friend will respond to the widespread fears that have been expressed on both sides of the House and will assure us that further consultation with the local authority associations will take place before the Bill proceeds to another place.

Mr. Woolmer: The new system of grant goes to the heart of the Bill. When all the elements in it are put aside, we see the real nature of the Bill.
The Government, having won the election last year, started with the spirit of freeing and liberating local government from the shackles and weight of bureaucracy. However, if the logic of these financial clauses is out, we shall have a growing bureaucracy and weight of detailed intervention by central Government.
The irony is that the record of local government in recent years, taken year in, year out, has been surprisingly good. With respect to the Minister of State, it is not good enough, after two or three months of this financial year, to call in aid a percentage difference and the need to rein that back as any explanation or justification for the swingeing and radical nature of the Bill. As was said earlier, it has all the hallmarks of an overreaction.
There are many basic problems in finding a fair way of distributing central Government finance to local authorities. All areas do not have the same basic wealth, resources or problems. Areas with the least wealth often have the worst problems. They often have the highest local spending to overcome those problems, the highest local rates because they have the least wealth and the greatest Government help.
The coincidence of a high rate, high spending and high Government grant is no accident. These three elements are often a reflection of real need. Such a

coincidence of features does not imply something unworthy or disreputable. It does not imply that those local authorities do not care about national problems. Indeed, they are often struggling to overcome national problems, because national problems affect local areas. The response to overcome local consequences of national problems often leads to these features.
There is no simple way of drawing up arithmetical or algebraic rules to deal with the complex relationship between the levels and rates of spending and their justification by hypothetical national standards.
8.45 pm
I suspect that the argument about a different way of distributing resources is totally removed from the true purpose of the clauses. The intention of these clauses is not to find a better way of distributing resources but to cut local government spending. If the Government's intention is to cut local government spending and Government spending generally, let them say so and let them cut spending. But they should not dress it up in a most complex system under the guise of trying to improve the distribution of grant. All the signs are that this will lead the Government further and further into the mire, into more and more detailed intervention. This course of action will not be worth the price that the Government will have to pay. If they wish to cut back spending, let them say so and let them face it out with local authorities. They should not get into a system which will lead to constitutional conflict and fundamental problems. I do not think that that is what the country wants.
Ultimately, local councils must face up to their judgment as to the balance of interest between high spending, high rates and the reaction of local households or business reaction. Some local authorities have to face up to the decision for low spending and low rates, and household and business reaction to that. The Minister of State knows quite well that many Labour Members and many people in areas of low rates who are suffering from poor services feel just as strongly that central Government should do something to compel improved services. It has been said several times this evening that


this kind of approach of central Government to seek detailed controls in the Bill, as the Minister of State will be the first to accept, means that the spirit of the Bill is that the Government know best and that ultimately they will impose their will on individual local authorities. However complicated this matter is, that is the message being given to local authorities.
That message and the action foreshadowed can act in two ways. Although many Labour Members would like to see it, I should not like to see central Government saying to local authorities which have low spending and poor services "We shall step in and insist that this is done and take action against you if you do not do it." That would be the end of local government.
This matter is very similar to a Government trying to do this in relation to the nationalised industries, trying to tell them not only how much money they can have from central Government—the equivalent of the rates—but how much they should produce and sell and what price they can charge. It is like trying to tell an industry how much it should produce, what price it should charge and how much money it will get from central Government. If the Government are doing that, they might as well run the business themselves. If they want to tell a local authority by some norm what must be its level of services, the rate that it should charge and how much it will get from central Government, the Government might as well try to run the local authorities themselves.
If Ministers come to the House to justify the consequences of their complex system of fixing these multipliers and these notional norms, they will fix those figures in order, at the margin, to affect individual authorities. That is what they will try to do. They will have to justify those formulae and consequences in relation to individual authorities, because they will finish up by penalising individual authorities. If they do not do that, the whole exercise has been a great waste.
How can a Secrtary of State justify penal action against local authorities in decisions about services, rates and spending levels which have been debated month after month by dozens of local representatives—

Mr. Edward Rowlands: Elected representatives.

Mr. Woolmer: —elected representatives —and dozens of highly paid officials, and argued at the polls in an election, and then introduce and debate in, I suspect, a matter of minutes or, at the very most, an hour or two, fairly draconian measures against individual authorities?
The Bill was brought in in a rush. The timing was wrong. It is regarded as an impetuous attack on local government for the worst and most short-sighted motives. At best, it is a piece of economic engineering. At worst, it is an attack on public services in the guise of trying to improve the method of rate distribution. It is not a genuine attempt to reform local government finance. I am the first to admit that certain aspects of local government need changing. The level of percentage rate grant has to some degree sapped local responsibility and democracy. There is a need for considered change and reform. However, as I said, the Bill was brought in for the worst of motives.
If the Government do not feel able to respond to the pleas of all the local authority associations, council after council, whether Labour-controlled or Conservative-controlled, and the Opposition, let them at least pay heed to Conservative Members who have spoken with a great deal of sense. I ask the Government to reconsider. Local government and the public will consider the Government none the worse if they reconsider and produce a measure which involves local responsibility and which will strengthen local government instead of ultimately destroying it.

Mr. Beaumont-Dark: Although I have made my main remarks, I wish to support virtually every hon. Member who has spoken this evening. It is unique to have a Bill on which all local government associations, of whatever complexion, are sensibly united against the Government's measures. It is also unique that no one outside the Government has spoken up for the Bill. My right hon. Friend has listened patiently, and I hope that he has noted what has been said.
Some of us are still getting over the previous occasion on which our right hon. Friends decided to tinker with local government and make changes here, there and everywhere. A disaster that we have


not yet overcome is the change in water authorities. I had hoped that the next time a Conservative Government brought in local government legislation they would lay a sensible foundation for good local government.
I reiterate that part VI of the Bill is bad in design, concept and proposed implementation. It is a relief to know that we are to hear something of the figures which have been kept from the Committee but which were delivered to the Financial Times. The Government, with their advisers, have not found a way round multiple regression analysis. I had to work with local government grant. Anyone who has had anything to do with it is aware that it is not a good system, but the proposed new system will be a not worse.
In one of the Secretary of State's golden speeches on Second Reading he said that he wanted to come to an agreement with local authorities. He rightly said that he wanted to stop high-spending authorities pre-empting a larger share of Government spending, and that electors should be more able to judge the decisions taken by their local authorities. He wanted to end the present automatic assumption that the more an authority spends, the more it pre-empts for itself at the expense of more cost-conscious authorities. I entirely agree with him on that point.
The three local authority associations got together, and, as we all know, that took some doing. They formulated a scheme which, in their view, was better, simpler and easier to understand, certain in its effect and had limited scope for manipulation to favour or discriminate against particular local authorities. Neither the Minister nor the Secretary of State has denied that the joint alternative meets the Government's proper objectives.
Therefore, I hope that tonight we shall hear that the Government will think again about the amendment. Governments of all complexions rarely think at all, judging by what one one reads in Bills. No one thinks any the worse of anyone who thinks again. Bearing in mind all that has been said in the House in the last three hours and outside among informed people over a number of months, I hope that the Government will think again.
The argument was put forward today that those people who do not agree with the Government about this matter are

basically scared little men. I must tell my right hon. and hon. Friends that most people I know who have risen to prominence in local government are not scared little men. They are people who understand what they are doing as much as and even more so than many Ministers of the Crown. When they tell us that we are wrong, their judgment is based on their experience, and I believe that they have much more chance of being right than we have.
It is time to think again, and I hope that the Government will grasp the opportunity. It is not too late. Once the clause is brought into law, we shall open ourselves yet again, not to co-operation between the two great spending parts of public life, but to confrontation. Let us get rid of confrontation, at least on this level.

Mr. King: I hope that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) will concede immediately that I have never described people in local authorities as "scared little men". Those are the words that he used; I did not and I assure him that I would not seek to use them in any sense. I was asked genuinely to account for some of the difficulties in the Act for the local authority associations. I agree that there are such difficulties.
This group of amendments covers in principle four items—a proposal that it should be possible to use a basis other than the present rateable values a proposal connected with negative marginal rate, and two others dealing with the problem of convergence or the prevention of convergence plus the positive incentive to greater reduction of expenditure. Amendment No. 311 would prevent the possibility of convergence but without the incentive—in other words, it would be neutral in its effect.
I shall comment briefly on the remarks of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). I must tell him that I do not think that we can go on meeting like this because at times I feel as though I am listening to an echo. The right hon. Gentleman's speech is half his own and half what he thinks I will say in reply to the points that he has made, not always with the exact inference that I would give. Of course, we have debated these matters


in Committee and I make no objection that they have been raised again.
Before I deal with the amendments, I wish to make certain general points about the block grant. In the context of the debate, these amendments have tended to open up a discussion on the principle of the block grant.
Certain hon. Members, including my hon. Friend the Member for Selly Oak, took the opportunity to discuss the transitional arrangements. Indeed, my hon. Friend said that lie would discuss part VI as a whole. The hon. Member for Liverpool, Edge Hill (Mr. Alton) decided to discuss this issue earlier. I therefore owe it to those hon. Members who have exercised their option to discuss the issue now, to say a word about the provision.
9 pm
There was fairly wide agreement that the present system of rate support grant would not do. My hon. Friend the Member for Devizes (Mr. Morrison) commented that the issue was extremely complicated, and that only a few experts understood it. The hon. Member for Caernarvon (Mr. Wigley) immediately claimed that one of his constituents was an expert. I should be interested to meet him, as under close cross-examination on multiple regression analysis we would probably find a few chinks in his armour.
This is an extremely complicated subject. I do not pretend that block grant, and grant-related expenditure assessment, will be simple. Given the range of items that it has to cover, the range of authorities, and the volume of expenditure involved, hon. Members will not find a simple child's guide written on the back of an envelope. My hon. Friend the Member for Selly Oak asked for all the figures and papers. The grant working group's summary papers of work done to date are available. An enormous amount of work is done. That work is being done as it was done in previous years. Every year, grant working groups meet central Government, the various Departments involved in local government services, local authority officials and members of the associations. Their work is extremely detailed and complex. The outcome of their work is announced at the various meetings of the consultative

council, and there is a statutory meeting in October.
A quotation was given from the Financial Times. However, the news is not always accurate. That comment was a little out of date. The work is going ahead in a satisfactory way. None of the work is easy, but we are making satisfactory progress. It was suggested that, as a result of block grant, Marsham Street—and the civil servants who sit in that ivory tower—would make assessments about the expenditure of every authority. The hon. Member for Caernarvon was concerned about that. I am sure he is aware that a needs assessment is made for every authority. That procedure will continue. However, we hope to simplify it. Although the system will not be simple, I hope that it will be simpler than the previous arrangement. I also hope that the relevant section of my Department will operate with lower staffing levels. That may indicate whether this measure is as complicated as some hon. Members have suggested.

Mr. Wigley: I am grateful to the right hon. Gentleman for mentioning my remarks. One big worry facing an area such as Gwynedd is that the present formula for multiple regression analysis cannot cope with the necessary range of circumstances, such as super-sparsity and so on. If the right hon. Gentleman simplifiies the system, might not the problem become more acute in such areas?

Mr. King: The hon. Gentleman has fairly pointed out the dilemma. In simplifying the system, we do not seek to leave out significant factors. If the hon. Gentleman talks to his constituent about the working of multiple regression analysis, he will find that there is some evidence that factors are included that coincide with the pattern of expenditure in different authorities. On any subjective assessment one would not have thought that those factors were highly significant as regards the expenditure levels of a particular authority.
In making the system simpler, we are concerned to look objectively at the factors that count for expenditure and to try to relate them more to the assessment of need. That simplification will not necessarily mean the elimination of significant factors of expenditure.
Whatever system we use for needs assessment, the peculiarities and differences between authorities make the challenge of trying to find the fairest way in which to distribute the grant a difficult and complicated issue. We have to make judgments in trying to arrive at the fairest basis.

Mr. Hattersley: The right hon. Gentleman referred to the calculation of needs assessment, or something like it, by officials, and implied that that was done already. Will he confirm that the AMA rightly says that in the new scheme the needs assessment will become a much more significant factor in the formula by which the grant is assessed? Does it not therefore become more important, and is it not more difficult for us to allow it to remain in the hands of officials?
Most important, the present individual needs assessment is not published as something that can be taken as a performance indicator of a council. The right hon. Gentleman proposes to publish it, and that makes all the difference in the world.

Mr. King: The publication point is contained in the amendments that the local authorities put to us. I find it difficult to understand why it should be considered more important under the new system. If the right hon. Gentleman had to receive the deputations that I have to receive from local authorities complaining about their needs assessments and the fact that they had not been adequately assessed and did not take into account the needs of particular areas, he would realise that it is already a matter of keen interest. I do not think that that will be vastly changed under the new arrangements.
Of course we are aware of the concern about the apparent unevenness of rateable value assessments across the country. There are problems, but they are inherent in the present rate support grant system as well. That is based on present rateable values.
The amendment suggests that there could be other bases. Three are defined and the other is an open-ended suggestion of any other basis. That is not a practical proposition. The answer to the difficulties is to approach the matter in a different way. We are concerned to move

towards the abolition of domestic rates. We feel that that will be the time to tackle the problem and that we should not attempt to do that during the interim stage.
The criticism is that the rateable value basis is erratic, quixotic between different areas, and is not a fair basis on which to assess the resources of individual local authorities. We do not feel that it would be practical to change the basis proposed in the Bill.
The Bill proposes:
A Rate Suppport Grant Report may provide for the determination of rateable values of hereditaments falling within any class of hereditaments by a method other than that specified in this section.
That refers more to the problem of accommodating mandatory rate relief for charities and the need to discount rateable values to that extent.
Both my hon. Friend the Member for Hornchurch (Mr. Squire) and the right hon. Member for Sparkbrook, made a noble attempt to make the issue of negative marginal rates comprehensible to hon. Members. It is a technical subject. I shall refresh my memory on a few points that I consider important to get on the record. The point I make is as applicable to the present rate support grant system as it will be to the block grant system. It is concerned with equalising the cost in rate poundage terms of equal variations in expenditure. That principle was accepted by the right hon. Gentleman and his party when in office and we accept it now.
If the grant is distributed in accordance with this principle, there are bound to be unequal grant effects because the resources of authorities vary significantly. This is not a flaw in the system but a natural consequence of the poundage equalising system. Because we are equalising the poundage cost of expenditure, ratepayers in authorities that experience negative marginal rates of grant are at no disadvantage compared with those in other authorities. It is not a question of taking grant away from authorities. For any given level of expenditure, they get the grant they need to level the same poundage as authorities spending at a comparable level in relation to grant-related expenditure. If one one does not accept the risk of negative marginal rate of grant, one blows out of


the water the concept inherent in the original proposal of my right hon. and learned Friend the Member for Hexham (Mr. Rippon) on rate support grant and inherent in our proposals that for an equivalent rate poundage one can provide an equivalent standard of service. We have thought it important to maintain that principle.
My hon. Friend the Member for Hornchurch referred to the concern felt by authorities over what I call the convergence argument, that, as well as any restraint on excessive expenditure, there would be an incentive for authorities that spent below the level of expenditure, and that it would be possible for the schedule to be operated in a way that encouraged higher levels of expenditure. There are technical problems about my hon. Friend's first amendment. It also provides a major incentive to substantial reductions in service levels where we believe that, below standard or grant-related expenditure, this should be a neutral line.
My hon. Friend's second amendment has such a neutral line below, but prevents the possibility of the schedule being used in such a way as to give a positive incentive to increasing expenditure. This is a serious amendment. It will be necessary for the Government to study the amendment carefully. I cannot recommend that the House should accept the amendment tonight, but I give the undertaking to my hon. Friend that we will look at it carefully. If it is possible to reach agreement on it, we shall seek to table an amendment in another place. We recognise that this is a serious amendment that could meet the point that concerns many of my hon. Friends.
A number of my hon. Friends asked me to clarify the point that was made in response to the letter that we received from the associations, and in pursuance of which an early-day motion was tabled calling on the Government to give urgent consideration to the proposed changes to the Bill's financial provisions put forward by the local authority associations. I sought to make clear in an intervention that we are conscious of the importance of the matter, and I sought to respond as positively as possible.
In the earlier debate, I discussed some of these concessions and made the point, when the original concern was expressed —I made some slightly disagreeable

noises at my right hon. and learned Friend the Member for Hexham when he was playing down the concessions we had made—about the prescriptive nature of the titles of standard expenditure and standard rate poundage, and also the point that was mentioned about publication that was the initial concern of the associations, that we have responded positively. We have already moved amendments to change the titles to which such exception was taken. The amendments to introduce the titles of grant-related expenditure and grant-related poundage have been accepted. The right hon. Member for Sparkbrook seeks to play that down, but he ignores his speeches in Committee to the effect that it was an important matter.
9.15 pm
The authorities also raised the issue of publicity. They ask that the information should be contained in a report to Parliament and that the national standard expenditure and the notional standard rate poundage should not be published except as part of a full descriptive report. We have undertaken that we shall publish that in the report. There is no intention of publishing it elsewhere. It is not possible to refuse to give the information. If the information is contained in a report laid before Parliament it must be given. As far as is possible we have sought to comply with the request about publication.
The authorities are also worried about the possible arbitrary use of multipliers. We undertook to modify the Bill to clarify the matter. A later amendment honours that undertaking. The authorities are worried about negative marginal rate grant below standard expenditure. We are not able to accept the principal point, but we made clear that we are prepared to table an amendment. We drew the authorities' attention to the problems and invited them to come back to us. I understand that they do not wish to pursue the point. If they do, we shall consider the matter further. I hope that I have given an indication of the way in which we have sought to respond to the local authorities in a positive and constructive way.
My hon. Friend the Member for Devizes asked about the difficulties faced


by treasurers and councils in knowing their position. I do not understand his anxiety. Under the new proposals the schedule published at the time of the rate support grant order will make it possible for an authority to determine exactly the local grant for a given level of expenditure. That might not be appreciated. The information will be clearer than it is at present.
My hon. Friend the Member for Somerset, North (Mr. Dean) talked of the issues that must be resolved and the possibility of further discussions. We have made clear how we believe that the new grant distribution system should stand and that we are prepared to talk further about it. The working parties are working out the details of the grant-related expenditure. That work will continue. However, we are ready at all times to discuss further matters.
There is general recognition among my hon. Friends that we cannot tolerate a system under which some authorities spend more of existing resources at the expense of the more prudent authorities. My hon. Friend the Member for Selly Oak made that point very fairly.
We believe that the proposals that we have put before the House represent the right way to approach the difficult and complex matter of local government expenditure and grant. We believe that the concessions we have made and the amendments that we are moving go a long way to meeting the concern of the associations on this point.
As I explained to my hon. Friend, with the exception of amendment No. 311, which we shall consider further, I cannot recommend his other amendments to the House. But I hope that the clarification that I have attempted to give will enable him to understand the reasons why.

Mr. Squire: The natural charm of my right hon. Friend—much used during three months of Committee deliberations —has been well stretched tonight in a debate in which some nine or 10 speakers have rightly criticised the block grant system. None the less, I am sure that nobody would wish a repetition of the issues so far raised.
I note the comments of my right hon. Friend on amendment No. 106, and,

although I am disappointed, I recognise that there are problems with the present system as there would be with any future system. I welcome the comments of my right hon. Friend on amendment No. 311, and, although I recognise that he could give no firm, complete and cast-iron commitment, I am pleased that he is looking favourably at it and that it may yet surface in another place.
Essentially the point remains that we have heard no major justification of the block grant system that is to be introduced. I think that it is important tonight that the House has an opportunity to express its opinion on that system. I believe that amendment No. 112, which is perhaps the most important and crucial of the amendments in this group, would be such an opportunity if the House were to agree and if I received your consent, Mr. Deputy Speaker, to withdraw amendment No. 106 in order to enable a Division to take place on that amendment.
Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 46

Orders of the Day — DETERMINATION OF STANDARD RATE POUNDAGE AND STANDARD EXPENDITURE

Amendments made: No. 107, in page 39, line 30, leave out
'standard rate poundage and standard'
and insert
'grant-related poundage and grant-related'.

No. 109, in page 39, line 34, leave out
'standard rate poundage and the standard'
and insert
'grant-related poundage and grant-related'.—[Mr. King.]

Amendment proposed: No. 112, in page 39, line 36, at end insert—
'(3) And the principles on which the standard rate poundage shall be determined shall be such that—

(a) if an authority's total expenditure exceeds their standard expenditure, that authority shall not receive less grant than they would have done had the difference between their total expenditure and their standard expenditure been smaller;
(b) if an authority's total expenditure is less than their standard expenditure, that authority shall not receive less grant than they would have done had the difference


between their total expenditure and their actual expenditure been greater;
(c) for all authorities with the same ratio between total expenditure [per head of population in their area and their standard expenditure or the same difference between their said total expenditure and their standard expenditure the ratio of the block grant they

receive to the block grant they would have equalled their standard expenditure shall be the same.'.—[Mr. Squire.].

Question put, That the amendment be made:—

The House divided: Ayes 239, Noes 289.

Division No. 393]
AYES
[9.22 pm


Abse, Leo
Fletcher, L. R. (Ilkeston)
Marshall, David (Gl'sgow,Shettles'n)


Adams, Allen
Fletcher, Ted (Darlington)
Marshall, Dr Edmund (Goole)


Allaun, Frank
Fookes, Miss Janet
Marshall, Jim (Leicester South)


Alton, David
Foot, Rt Hon Michael
Martin, Michael (Gl'gow, Springb'rn)


Anderson, Donald
Ford, Ben
Maxton, John


Archer, Rt Hon Peter
Forrester, John
Maynard, Miss Joan


Ashton, Joe
Foster, Derek
Mellish, Rt Hon Robert


Atkinson, Norman (H'gey, Tott'ham)
Freeson, Rt Hon Reginald
Mikardo, Ian


Bagler, Gordon A. T.
Garrett, John (Norwich S)
Millan, Rt Hon Bruce


Barnett, Guy (Greenwich)
Garrett, W. E. (Wallsend)
Miller, Dr M. S. (East Kilbride)


Barnett, Rt Hon Joel (Heywood)
George, Bruce
Mitchell, Austin (Grimsby)


Beaumont-Dark, Anthony
Gilbert, Rt Hon Dr John
Mitchell, R. C. (Soton, Itchen)


Beith, A. J
Ginsburg, David
Morris, Rt Hon Alfred (Wythenshawe)


Bennett, Andrew (Stockport N)
Gourlay, Harry
Morris, Rt Hon Charles (Openshaw)


Bidwell, Sydney
Graham, Ted
Morris, Rt Hon John (Aberavon)


Boothroyd, Miss Betty
Grant, John (Islington C)
Moyle, Rt Hon Roland


Bottomley, Rt Hon Arthur (M'brough)
Hamilton, James (Bothwell)
Newens, Stanley


Bray, Dr Jeremy
Hamilton, W. W. (Central Fife)
Oakes, Rt Hon Gordon


Brown, Hugh D. (Provan)
Harrison, Rt Hon Walter
Ogden, Eric


Brown, Robert C. (Newcastle W)
Hart, Rt Hon Dame Judith
O'Halloran, Michael


Brown, Ronald W. (Hackney S)
Hattersley, Rt Hon Roy
O'Neill, Martin


Brown, Ron (Edinburgh, Leith)
Haynes, Frank
Orme, Rt Hon Stanley


Buchan, Norman
Healey, Rt Hon Denis
Paisley, Rev Ian


Callaghan, Rt Hon J. (Cardiff SE)
Heffer, Eric S.
Palmer, Arthur


Callaghan, Jim (Middleton &amp; P)
Hogg, Norman (E Dunbartonshire)
Park, George


Campbell, Ian
Holland, Stuart (L'beth, Vauxhall)
Parker, John


Campbell-Savours, Dale
Home Robertson, John
Parry, Robert


Canavan, Dennis
Homewood, William
Pavitt, Laurie


Carmichael, Neil
Hooley, Frank
Pendry, Tom


Carter-Jones, Lewis
Horam, John
Penhaligon, David


Cartwright, John
Howells, Geraint
Powell, Raymond (Ogmore)


Clark, Dr David (South Shields)
Huckfield, Les
Price, Christopher (Lewisham West)


Cocks, Rt Hon Michael (Bristol S)
Hudson Davies, Gwilym Ednyfed
Race, Reg


Cohen, Stanley
Hughes, Mark (Durham)
Radice, Giles


Coleman, Donald
Hughes, Robert (Aberdeen North)
Rees, Rt Hon Merlyn (Leeds South)


Concannon, Rt Hon J D.
Irving, Charles (Cheltenham)
Roberts, Allan (Bootle)


Conlan, Bernard
Jay, Rt Hon Douglas
Roberts, Ernest (Hackney North)


Cook, Robin F.
John, Brynmor
Roberts, Gwilym (Cannock)


Cowans, Harry
Johnson, Walter (Derby South)
Robertson, George


Craigen, J. M. (Glasgow, Maryhill)
Jones, Rt Hon Alec (Rhondda)
Robinson, Geoffrey (Coventry NW)


Crowther, J. S.
Jones, Barry (East Flint)
Robinson, Peter (Belfast East)


Cryer, Bob
Jones, Dan (Burnley)
Rodgers, Rt Hon William


Cunliffe, Lawrence
Kerr, Russell
Rooker, J. W.


Cunningham, George (Islington S)
Kilfedder, James A.
Roper, John


Dalyell, Tam
Kilroy-Silk, Robert
Ross, Ernest (Dundee West)


Davies, Rt Hon Denzil (Llanelli)
Kinnock, Neil
Ross, Stephen (Isle of Wight)


Davies, Ifor (Gower)
Lambie, David
Rowlands, Ted


Davis, Clinton, (Hackney Central)
Lamborn, Harry
Ryman, John


Davis, Terry (B'rm'ham, Stechford)
Leadbitter, Ted
Sandelson, Neville


Deakins, Eric
Leighton, Ronald
Sever, John


Dean, Joseph (Leeds West)
Lewis, Arthur (Newham North West)
Sheldon, Rt Hon Robert (A'ton-u-L)


Dempsey, James
Lewis, Ron (Carlisle)
Shore, Rt Hon Peter (Step and Pop)


Dewar, Donald
Litherland, Robert
Short, Mrs Renée


Dixon, Donald
Lofthouse, Geoffrey
Silkin, Rt Hon John (Deptford)


Dobson, Frank
Lyon, Alexander (York)
Silkin, Rt Hon S. C. (Dulwich)


Dormand, Jack
Lyons, Edward (Bradford West)
Silverman, Julius


Douglas, Dick
McCartney, Hugh
Skinner, Dennis


Douglas-Mann, Bruce
McDonald, Dr Oonagh
Smith, Rt Hon J (North Lanarkshire)


Duffy, A. E. P.
McElhone, Frank
Snape, Peter


Dunnett, Jack
McGuire, Michael (Ince)
Soley, Clive


Dunwoody, Mrs Gwyneth
McKay, Allen (Penistone)
Spearing, Nigel


Eastham, Ken
McKelvey, William
Spriggs, Leslie


Edwards, Robert (Wolv SE)
MacKenzie, Rt Hon Gregor
Squire, Robin


Ellis, Raymond (NE Derbyshire)
Maclennan, Robert
Steel, Rt Hon David


Ellis, Tom (Wrexham)
McNally, Thomas
Stoddart, David


English, Michael
McNamara, Kevin
Stott, Roger


Ennals, Rt Hon. David
McQuade, John
Strang, Gavin


Evans, loan (Aberdare)
McTaggart, Robert
Straw, Jack


Faulds, Andrew
McWilliam, John
Summerskill, Hon Dr Shirley


Field, Frank
Magee, Bryan
Taylor, Mrs Ann (Bolton West)


Fiannery, Martin
Marks, Kenneth
Thomas, Jeffrey (Abertillery)




Thomas, Mike (Newcastle East)
Watkins, David
Wilson, William (Coventry SE)


Thomas, Dr Roger (Carmarthen)
Weetch, Ken
Winnick, David


Thorne, Stan (Preston South)
Wellbeloved, James
Woodall, Alec


Tilley, John
White, James (Glasgow, Pollok)
Woolmer, Kenneth


Tinn, James
Whitehead, Phillip
Wright, Shella


Torney, Tom
Whitlock, William
Young, David (Bolton East)


Urwin, Rt Hon Tom
Wigley, Dafydd



Varley, Rt Hon Eric G.
Willey, Rt Hon Frederick
TELLERS FOR THE AYES:


Wainwright, Edwin (Dearne Valley)
Williams, Rt Hon Alan (Swansea W)
Mr. George Morton and


Walker, Rt Hon Harold (Doncaster)
Williams, Sir Thomas (Warrington)
Mr. John Evans.


NOES


Adley, Robert
Eggar, Timothy
Lawrence, Ivan


Aitken, Jonathan
Elliott, Sir William
Lawson, Nigel


Alexander, Richard
Emery, Peter
Lee, John


Allson, Michael
Eyre, Reginald
Lennox-Boyd, Hon Mark


Amery, Rt Hon Julian
Fairbairn, Nicholas
Lester, Jim (Beeston)


Alison, Michael
Faith, Mrs. Sheila
Lewis, Kenneth (Rutland)


Arnold, Tom
Farr, John
Lloyd, Ian (Havant &amp; Waterloo)


Atkins, Robert (Preston North)
Fell, Anthony
Lloyd, Peter (Fareham)


Baker, Nicholas (North Dorset)
Fenner, Mrs Peggy
Loveridge, John


Banks, Robert
Finsoerg, Geoffrey
Luce, Richard


Bell, Sir Ronald
Fisher, Sir Nigel
Lyell, Nicholas


Bendall, Vivian
Fletcher, Alexander (Edinburgh N)
McCrindle, Robert


Benyon, Thomas (Abingdon)
Fletcher-Cooke, Charles
Macfarlane, Neil


Benyon, W. (Buckingham)
Forman, Nigel
MacGregor, John


Best, Keith
Fowler, Rt Hon Norman
Mackay, John (Argyll)


Bevan, David Gilroy
Fox, Marcus
Macmillan, Rt Hon M. (Farnham)


Biffen, Rt Hon John
Fraser, Rt Hon. H.(Stafford &amp; St)
McNair-Wilson, Michael (Newbury)


Biggs-Davison, John
Fraser, Peter (South Angus)
McNair-Wilson, Patrick (New Forest)


Blackburn, John
Galbraith, Hon T. G. D.
McQuarrie, Albert


Blaker, Peter
Gardiner, George (Reigate)
Madel, David


Body, Richard
Gardner, Edward (South Fylde)
Major, John


Bonsor, Sir Nicholas
Garel-Jones, Tristan
Marland, Paul


Boscawen, Hon Robert
Glyn, Dr. Alan
Marlow, Tony


Bottomley, Peter (Woolwich West)
Goodhart, Philip
Marshall, Michael (Arundel)


Bowden, Andrew
Goodhew, Victor
Marten, Neil (Banbury)


Boyson, Dr Rhodes
Goodlad, Alastair
Mates, Michael


Braine, Sir Bernard
Gorst, John
Mather, Carol


Bright, Graham
Gow, Ian
Maude, Rt Hon Angus


Brinton, Tim
Grant, Anthony (Harrow C)
Mawby, Ray


Brittan, Leon
Gray, Hamish
Mawhinney, Dr Brian


Brocklebank-Fowler, Christopher
Greenway, Harry
Maxwell-Hyslop, Robin


Brooke, Hon Peter
Grieve, Percy
Mayhew, Patrick


Brotherton, Michael
Griffiths, Eldon (Bury St Edmunds)
Mellor, David


Brown, Michael (Brigg &amp; Sc'thorpe)
Griffiths, Peter (Portsmouth N)
Meyer, Sir Anthony


Browne, John (Winchester)
Grist, Ian
Miller, Hal (Bromsgrove &amp; Redditch)


Bruce-Gardyne, John
Gummer, John Selwyn
Mills, Iain (Merlden)


Bryan, Sir Paul
Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Mills, Peter (West Devon)


Buchanan-Smith, Hon Alick
Hamilton, Michael (Salisbury)
Miscampbell, Norman


Buck, Antony
Hampson, Dr Keith
Mitchell, David (Basingstoke)


Budgen, Nick
Hannam, John
Moate, Roger


Bulmer, Esmond
Haselhurst, Alan
Monro, Hector


Burden, F. A.
Havers, Rt Hon Sir Michael
Montgomery, Fergus


Butcher, John
Hawkins, Paul
Morris, Michael (Northampton, Sth)


Butler, Hon Adam
Hawksley, Warren
Morrison, Hon Peter (City of Chester)


Cadbury, Jocelyn
Hayhoe, Barney
Murphy, Christopher


Carlisle, John (Luton West)
Heddle, John
Myles, David


Carlisle, Kenneth (Lincoln)
Henderson, Barry
Neale, Gerrard


Chalker, Mrs. Lynda
Heseltine, Rt Hon Michael
Needham, Richard


Channon, Paul
Hicks, Robert
Nelson, Anthony


Churchill, W. S.
Higgins, Rt Hon Terence L.
Neubert, Michael


Clark, Hon Alan (Plymouth, Sutton)
Hill, James
Newton, Tony


Clark, Sir William (Croydon South)
Holland, Philip (Carlton)
Onslow, Cranley


Clarke, Kenneth (Rushcliffe)
Hooson, Tom
Oppenheim, Rt Hon Mrs Sally


Clegg, Sir Walter
Hordern, Peter
Osborn, John


Cockeram, Eric
Howell, Rt Hon David (Guildford)
Page, John (Harrow, West)


Colvin, Michael
Howell, Ralph (North Norfolk)
Page, Rt Hon Sir R. Graham


Cope, John
Hunt, David (Wirral)
Page, Richard (SW Hertfordshire)


Corrie, John
Hunt, John (Ravensbourne)
Parris, Matthew


Costain, A. P.
Jenkin, Rt Hon Patrick
Patten, Christopher (Bath)


Cranborne, Viscount
Jessel, Toby
Patten, John (Oxford)


Critchley, Julian
Johnson Smith, Geoffrey
Pattie, Geoffrey


Dickens, Geoffrey
Jopling, Rt Hon Michael
Pawsey, James


Dorrell, Stephen
Joseph, Rt Hon Sir Keith
Peyton, Rt Hon John


Douglas-Hamilton, Lord James
Kimball, Marcus
Pink, R. Bonner


Dover, Denshore
King, Rt Hon Tom
Pollock, Alexander


du Cann, Rt Hon Edward
Kitson, Sir Timothy
Porter, George


Dunlop, John
Knight, Mrs Jill
Prentice, Rt Hon Reg


Dunn, Robert (Dartford)
Knox, David
Price, David (Eastleigh)


Durant, Tony
Lamont, Norman
Prior, Rt Hon James


Dykes, Hugh
Lang, Ian
Proctor, K. Harvey


Eden, Rt Hon Sir John
Langford-Holt, Sir John
Raison, Timothy


Edwards, Rt Hon N. (Pembroke)
Latham, Michael
Rathbone, Tim







Rees, Peter (Dover and Deal)
Spicer, Michael (S Worcestershire)
Waddington, David


Rees-Davies, W. R.
Sproat, Iain
Wakeham, John


Renton, Tim
Stainton, Keith
Waldegrave, Hon William


Rhodes James, Robert
Stanley, John
Walker, Bill (Perth &amp; E Perthshire)


Ridley, Hon Nicholas
Steen, Anthony
Walker-Smith, Rt Hon Sir Derek


Ridsdale, Julian
Stevens, Martin
Wall, Patrick


Rifkind, Malcoim
Stewart, Ian (Hitchin)
Walters, Dennis


Roberts, Wyn (Conway)
Stewart, John (East Renfrewshire)
Ward, John


Rossi, Hugh
Stokes, John
Warren, Kenneth


Rost, Peter
Stradling Thomas, J.
Watson, John


Royle, Sir Anthony
Tapsell, Peter
Wells, John (Maidstone)


Sainsbury, Hon Timothy
Taylor, Robert (Croydon NW)
Wells, Bowen (Hert'rd &amp; Stevn'age)


St. John-Stevas, Rt Hon Norman
Taylor, Teddy (Southend East)
Wheeler, John


Scott, Nicholas
Tebbit, Norman
Whitney, Raymond


Shaw, Giles (Pudsey)
Temple-Morris, Peter
Wickenden, Keith


Shaw, Michael (Scarborough)
Thomas, Rt Hon Peter (Hendon S)
Wilkinson, John


Shelton, William (Streatham)
Thompson, Donald
Williams, Delwyn (Montgomery)


Shepherd, Colin (Hereford)
Thorne, Neil (Ilford South)
Winterton, Nicholas


Shepherd, Richard (Aldridge-Br'hills)
Thornton, Malcolm
Wolfson, Mark


Shersby, Michael
Townend, John (Bridlington)
Young, Sir George (Acton)


Silvester, Fred
Townsend, Cyril D. (Bexieyheath)
Younger, Rt Hon George


Sims, Roger
Trippier, David



Skeet, T. H. H.
Trotter, Neville
TELLERS FOR THE NOES:


Smith, Dudley (War. and Leam'ton)
van Straubenzee, W. R.
Mr. Spencer Le Merchant and


Speller, Tony
Vaughan, Dr. Gerard
Mr. Anthony Berry,


Spence, John
Viggers, Peter

Question accordingly negatived.

Clause 47

ADJUSTMENTS OF DISTRIBUTION OF BLOCK GRANT

Mr. King: I beg to move amendment No. 114, in page 39, line 37, leave out "subsection (2) below" and insert
'the following provisions of this section '.

Mr. Deputy Speaker (Mr. Richard Crawshaw): With this it will be convenient to take Government amendments Nos. 116 and 121.

Mr. King: These amendments cover the point to which I have just referred in a previous debate in which the Government, in response to the request from the associations, are tabling amendments to circumscribe the application of multipliers.
The amendment is self-explanatory as to the way in which this will be done. As a matter of general principle, multipliers will be used only to increase grant. They will be used to decrease grant only when there would otherwise be an unreasonable increase in the amount of grant, taking one year with another, that the authority would receive.

Amendment agreed to.

Amendments made:

No. 115, in page 39, line 41, leave out 'standard rate' and insert 'grant-related'.

No. 116, in page 39, line 43, at end add—

'(1A) Except as provided in subsection (1B) below, the power conferred by subsection (1) above may only be exercised for the purpose of increasing the amount of block grant payable to a local authority.

(1B) The power may be exercised for the purpose of decreasing the amount of block grant payable to a local authority if the Secretary of State is satisfied that there will be an unreasonable increase, unless he exercises the power, in the amount of block grant payable to the authority for a year compared with the amount payable to them for the previous year.'. —[Mr. King.]

Mr. Squire: I beg to move amendment No. 117, in page 40, line 4, leave out '(a)'.

Mr. Deputy Speaker: With this it will be convenient to take amendment No. 118, in page 40, line 5, leave out from 'authorities' to end of line 20 and insert—

(i) for the purpose of limiting grant changes from one year to the next;
(ii) to take account of less than the actual gross rateable value of an authority or group of authorities in calculating entitlement to block grant;
(iii) to give effect to the equalisation of resources within London.'.

Mr. Squire: These are fairly small but very important amendments submitted by the Association of Metropolitan Authorities. They deal with the issue that came up briefly in our last debate, namely, that of multipliers.
The clause speaks of multipliers as the way to adjust local authorities' block grant entitlements. The local authority associations consider that the use of multipliers is one of the factors which make a block grant system very difficult to understand, let alone explain, as one or two


hon. Members found in the previous debate. Given, however, that the block grant system is dependent on the use of multipliers, the local authority associations consider that legislation should make quite clear the purposes for which multipliers may be used.
If hon. Members read the clause as it is currently drafted, they may well come to the conclusion that multipliers could be used for almost any or all purposes. My amendment would meet the objective of the local authorities and allow the sorts of adjustments which were found necessary within the rate support grant system to continue.
It would allow three specific adjustments. It would allow for the damping of grant distributions from year to year and for the operation of a safety net, if that were necessary, to protect individual local authorities against the effects of excessive shifts in needs or standard expenditure assessments. This is a very important safety net, as many hon. Members will now from past years' debates on the eects of changes in rate support grant. Local authorities can find themselves left in a very difficult position due to the somewhat arbitrary nature of such shifts.
Secondly, it would enable a London resources clawback—or, indeed, that of any other high rateable value authority—to continue to be set at less than 100 per cent. to offset the extent to which London's resources are overvalued by the present valuation system. I have referred to that in previous debates. I do not think that I need say any more about the present imbalance.
Finally, it would enable the system within London equalisation arrangements to continue. The local authorities and I consider that paragraphs (b) (c) and (d) add unnecessary complications to a Bill which, in all honesty, is already fairly complicated.

Mr. King: I hope that my hon. Friend the Member for Hornchurch (Mr. Squire) will accept that the amendment which I moved in advance of his goes a little further than his. We think that it is preferable to his amendment because it meets the principal concerns of the associations. The difficulty about his amendment is that it is rather restricted, and there could be applications in which it

might work to the disadvantage of authorities. I hope that on reflection my hon. Friend will agree that the undertaking that we have given to ensure that the multiplier is used as prescribed in the amendments is the best way to proceed, and I hope therefore that he will ask leave to withdraw his amendment.

Mr. Squire: I welcome the action taken by the Government in the previous amendments. I am sure of one thing, and one thing alone—that the House would not wish to have a major debate on multipliers at this stage.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 119, in page 40, line 12, leave out 'standard' and insert 'grant-related'.

No. 312, in page 40, line 18, leave out
'level of rateable value per head of the population'
and insert 'gross rateable value'.

No. 121, in page 40, line 41, at end add—
'(7) In its application to block grant payable to a local authority for the commencing year subsection (1B) above shall have effect as if there were substituted for the reference to the amount of block grant payable to the authority for the previous year a reference to an amount determined by the Secretary of State.'.—[Mr. Fox.]

Clause 48

THE RATE SUPPORT GRANT REPORT

Mr. Fox: I beg to move amendment No. 122, in page 41, line 15, leave out from 'State' to end of line 20 and insert
'and the Minister of Transport shall consult such associations of local authorities as appear to them to be concerned and any local authority with whom consultation appears to them to be desirable '.
This is simply a drafting amendment that in no way changes the meaning of the clause.

Amendment agreed to.

Mr. Fox: I beg to move amendment No. 123, in page 41, line 28, leave out 'grant' and insert
'any of the relevant grants'.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 124 and 130.

Mr. Fox: These amendments are needed in order to agree the terminology used in clause 48(1), which defines the relevant grants for the purposes of clauses 48 and 49. They limit the scope of clauses 48 and 49 so that only the payment of relevant grants will be dependent upon the approval by the House of Commons of the rate support grant report. As they stand, the clauses appear to relate to grants generally, which is not intended.

Amendment agreed to.

Amendment made: No. 124, in page 41, line 31, leave out 'of grant'.—[Mr. Fox.]

Clause 49

SUPPLEMENTARY REPORTS

Mr. Fox: I beg to move amendment No. 125, in page 41, line 38, leave out
'if he thinks fit, make a supplementary report'
and insert
'at such time or times as he thinks fit, make one or more supplementary reports'.
The purpose of the amendment is to put beyond doubt that there can be more than one supplementary report, but each one may make fresh determinations in place of all or any of those made by the rate support grant report.

Amendment agreed to.

Mr. Fox: I beg to move amendment No. 127, in page 41, line 43, leave out 'make' and insert 'specify'.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 128 and 129.

Mr. Fox: These are drafting amendments, the purpose of which is to bring clause 49 into line with clause 48, under which a rate support grant report is required to specify all the determinations required in part VI of the Bill. In order to avoid confusion, they substitute "specify" and "specified" for "make" and "made" in clause 49, so allowing a supplementary report to specify fresh determinations. There is no other purpose.
Amendment No. 129 is purely a drafting amendment and it in no way changes the meaning of the clause.

Amendment agreed to.

Amendments made: No. 128, in page 41, line 44, leave out 'made' and insert 'specified'.

No. 129, in page 42, line 8, leave out subsection (6) and insert—
'(6) In addition to specifying any fresh determinations a supplementary report shall specify the considerations leading to them.'.

No. 130, in page 42, line 13, leave out 'grant' and insert 'any of the relevant grants'.—[Mr. Fox.]

Clause 52

SUBMISSION OF INFORMATION

Mr. Fox: I beg to move amendment No. 131, in page 43, line 4, after `require ' insert
'for the purposes of sections 42 to 51 above'.
The purpose of the amendment is to limit the scope of the clause. It would mean that each local authority would be required to submit such information as is relevant under sections 42 to 51 of the Act. It was never intended that the Minister of Transport or the Secretary of State should have the broad power that the unamended clause would confer.

Amendment agreed to.

Clause 54

CHANGES IN RATEABLE VALUES

Mr. Fox: I beg to move amendment 132, in page 44, line 39, at end add—
'(6A) Before making regulations under this section the Secretary of State shall consult such associations of local authorities as appear to him to be concerned and any local authority with whom consultation appears to him to be desirable.'.

Mr. Deputy Speaker: With this we may take Government amendment No. 133.

Mr. Fox: This amendment protects rating authorities from the effect of retroactive reductions in rateable value, and provides that the block grant entitlement shall be recalculated if certain conditions are fulfilled. One of the conditions is that the net reduction in gross rateable value shall exceed a percentage to be specified in regulations. The amendment requires the Secretary of State to consult local authorities before specifying the percentage in the regulations.

Amendment No. 133 is a drafting amendment and in no way changes the meaning of the clause.

Amendment agreed to.

Amendment made: No. 133, in page 44, line 40, leave out
'such regulations'.—[Mr. Fox.]

Clause 55

RATE SUPPORT GRANT—SUPPLEMENTARY

Mr. Fox: I beg to move amendment No. 134, in page 45, line 3, leave out subsections (2) and (3).

Mr. Deputy Speaker: With this we may take Government amendment No. 135.

Mr. Fox: Subsection (2) amends section 48(4) of the General Rate Act 1967, which relates to the reduction of rates on dwellings. This section of the General Rate Act 1967, which provides for regulations to be made in respect of domestic rate relief in the City of London, is to be repealed because schedule 8(2) of the Bill provides in permanent form what has previously been an annual regulation forming part of the rate support grant regulations. The reference to section 48(4) of the General Rate Act 1967 is therefore no longer required in the clause.
Amendment No. 135 is consequential. Clause 111(3) of the Housing Bill makes a change in the definition of rate support grant relevant expenditure. We took account of this in the amendments to clause 43. As drafted, the Housing Bill refers to section 1 of the Local Government Act 1974. That section, which defines RSG relevant expenditure is being replaced by clause 43. Therefore, we need to complete the circle by getting it right in the Housing Bill.

Amendment agreed to.

Amendment made:

No. 135, in page 45, line 40, at end add—
'(6A) In section 111(3) of the Housing Act 1980 for the words "section 1 of the Local Government Act 1974" there shall be substituted the words "section 43 of the Local Government, Planning and Land Act 1980 ".'. —[Mr. Fox.]

Clause 58

EXPENDITURE TO WHICH PART VIII APPLIES

Amendment made:

No. 136, in page 47, leave out line 1.—[Mr. Fox.]

Clause 59

EXPENDITURE WHICH AUTHORITIES MAY MAKE

Mr. Gordon Oakes: I beg to move amendment No. 137, in page 47, line 18, leave out 'for each year' and insert
'for a period of three years. The Minister may subsequently vary the allocations made for the second and third years by an amount but may not reduce the provisional allocations made for the second and third years by more than 20 per cent.'.
We have now reached part VIII of the Bill, which deals with the capital expenditure of local authorities. The three local authority associations combined detest these provisions with the same virulence as they detested part VI, largely because most of the provisions are unnecessary and have been inserted contrary to the advice of the local authority associations because the Government wanted it that way.
At present, a local authority which wants capital for a capital development can raise it from its own resources from revenue or, if it wants to borrow the capital, it must go to the Government for loan sanctions. That has worked very well. We accept that there must be some central Government control over the total capital spending of local authorities. When we were in government we exercised that duty over the capital spending of local authorities. That has now been thrown away by the Government. Instead, this new system has been introduced which deals with the capital requirements of local authorities in individual years.
This is a modest amendment. Its effect would be to secure that, instead of local authorities being hog-tied to capital expenditure for any one given year, there would be a three-year period so that local authorities can with confidence plan their capital spending over that period.
There is a great deal of evidence that local authorities, far from overspending on capital in the past, have, year after year under successive Governments, frequently fallen short of the actual capital amount they could have spent. Therefore, I can see no motive for the Government to introduce part VIII in order to reduce capital spending.
What the Government are really doing is putting local authorities with a capital spending in a unique class. The central Government do not do this. They have their PESC figures. Wisely, they have PESC figures over a period of years, so that capital transactions and capital expenditure, of necessity, for any large scheme, translate beyond one year. They go from one year to two years, to three years and sometimes even more—of necessity, by the very nature of capital expenditure.
The central Government do not do this in hived-off annual parts. Business and commerce would laugh at this kind of expenditure. In expending its capital requirements, no firm in the country would ever dream of locking it into boxes a year at a time and not providing for capital expenditure to run for over a period of a single given year, and yet that is precisely what the Government are suggesting in this part of the Bill.
I am delighted that the hon. Member for Hornchurch (Mr. Squire), who has moved so many amendments from the Conservative Benches in support of the local authority associations, has appended his name to this amendment. The three associations are simply asking that there be a period of three years so that local authorities know where they are and do not engage—which they well could do under the present system—in capital expenditure in one year and then find that that expenditure is totally aborted by a change in the grant for the subsequent year or the year after that.
I cannot think of any formula devised by this House or anyone else that would create more waste than that kind of system—buildings and capital developments begun and then ended and remaining unfinished until the next year that came along which got an approval so that the money was there for the local authority to carry on.
The system that the Government have proposed will also cause unnecessary bureaucracy in having people assessing all the time the annual boxed-in requirements for each particular year. So again, another object of central Government, the reduction of manpower of local authorities, and particularly manpower doing needless bureaucratic jobs, would be infringed by part VIII, which is totally unnecessary with the present system of working.
The amendment is modest indeed as compared with the distaste which local authorities have for the whole of part VIII. Because it is a modest amendment, because the local authorities want it, and because local authorities would be in a position unique in this country in having to deal with their capital expenditure on an annual accountancy basis rather than in the real world, accepting the fact that many projects take more than one year to complete, and sometimes many years, I hope that the Government, although they set their face so hard against all the amendments to part VI, will see their way clear to accepting at least the spirit of this amendment, as inspired by the three associations, even if they do not accept its wording.

Mr. Richard Alexander: I hope that my right hon. Friend the Minister of State will see some merit in this amendment, which has been quite courageously supported by my hon. Friend the Member for Hornchurch (Mr. Squire). He and I have had some experience in local government, mine going back some 15 years, if one includes the time that I have spent as a Member of this House.
We cannot all go along with all of the local authorities' objections to the block grant system, although I think that we can understand some of their anxieties. If the clause remains unamended, we shall sympathise with the Opposition. How can local authorities plan their expenditure on a system that is based on single year allocations? Concern has rightly been shown for expenditure control. Governments—like everyone else—need to plan expenditure a year ahead. Local authorities also have to plan ahead. Even the least progressive local authority is forced to think more than a year ahead.
I support the amendment because the clause penalises the local authority that tries to think more than a year ahead. The clause gives no guarantee of continuity from one year to the next. Is it wrong that local authorities should want to know what lies in store in terms of Government allocations in future years?
Anyone who has served in local government will know that local authorities need to plan more than one year ahead. Let us accept that the block grant system is introduced. It would then become essential for an indication to be given annually of the minimum allocation to each authority in the few years immediately ahead. We should catch spendthrift local authorities, such as Lambeth and South Yorkshire. Indeed, this Bill is largely designed to do that. In addition, we would be legislating for ordinary, prudent authorities, such as Newark district council and Nottingham county council. Those authorities try to live within their means. They need to know where they stand from year to year. They wish to plan sensibly for the future. They are gravely worried about the implications of the clause.

Mr. King: I understand the points made by the right hon. Member for Widnes (Mr. Oakes) and by my hon. Friend the Member for Newark (Mr. Alexander). They suggested that authorities should be given the best possible guidance so that they can plan their capital expenditure. I understand that local authorities need to plan as far forward as possible. We intend to give the best possible indication of capital expenditure provisions for following years.
I cannot accept the amendment, nor can I give a firm commitment now about the exact levels. However, I accept the principle behind it. I am mindful of the difficulties of practice. I checked upon some details about the Labour Government. They decided that for each of three years they would approve borrowing on up to 80 per cent. of the previous year's allocation. They decided that they would allow that expectation for the next year. However, they had to withdraw that approval halfway through the year in every year. They could not implement that provision for the locally determined sector.
I am sure that the right hon. Gentleman will accept that the previous Government could not implement their decision. He has suggested that the clause should be amended, but experience sadly shows that it is impossible to anticipate with any certainty the state of the British economy and the public expenditure provision. It is therefore impossible to accept the amendment. I may have disappointed my hon. Friend the Member for Newark, who made a fair point. However, I cannot commend the amendment to the House in its present form. Experience shows that the previous Labour Government had to change the allocation every year. They allocated a borrowing level of 80 per cent. to the locally determined sector, but they had to change that allocation in the following year. Therefore, it would be a triumph of hope over experience to recommend that this should be written in to the Bill. At the same time, it would be our intention to improve on the record of the previous Government and also to seek to give—

It being Ten o'clock, the debate stood adjourned.

Ordered,
That, at this day's sitting, the Local Government, Planning and Land (No. 2) Bill may be proceeded with, though opposed, until any hour.— [Mr. Brooke.]

Question again proposed, That the amendment be made.

Mr. King: The message behind the amendment is entirely accepted and we shall seek to give the clearest indication of forward years to the authorities in their capital expenditure allocations.

Mr. Oakes: Although I accept that the Minister means what he says—that the Government will give the best indications that they can—I do not think that that is acceptable or could be acceptable to the local authorities.
First, I shall deal with the Minister's analogy of the locally determined sector when he said that the Government of which I was a member found themselves in this difficulty year after year. That is not a fair analogy. I am not just talking about the locally determined sector; I am talking about the old loan sanction. Once loan sanctions were given, they were not in any way tied to time. Once an


authority had loan function for a project, it could proceed with that project. It did not have to come back to central Government or fear that in a subsequent year there might be some drastic alteration that would halt that project or bring it to an end. Therefore, it is not a fair comparison to use the question of locally determined sector money in this regard.
The Minister said that he would give the best indications that he could in this matter, but the amendment that we propose—and I am grateful for the support of the hon. Member for Newark (Mr. Alexander)—is even more modest than I led the House to believe in my initial speech. It says:
The Minister may subsequently vary the allocations made for the second and third years by an amount but may not reduce the provisional allocations made for the second and third years by more than 20 per cent.'.
Therefore, we are allowing a degree of flexibility in operating the capital limit on local authority spending.
We have not heard from the Minister any defence whatever of why the Government seek to introduce part VIII of the Bill in this way. The amendment limits in a very narrow way the damage that part VIII will do to local authorities. I should have thought that the Minister, in replying to the debate, would have put up some defence for the complete change in practice that the Government are introducing, which is directly contrary to what all three local authority associations want.
The local authorities want a system that will give them a guarantee of minimum approval. Even then, we are prepared in the amendment to allow a 20 per cent. variation and a 20 per cent. margin. Does the Minister realise what will happen if this is not written into the Bill? Even if he gives his "best indications" to a local authority, the treasurer or the engineer of that authority cannot rely on them when he is planning a capital project. He may be faced with the fact that a school, a sewerage system, a road system or a building development may be half built when the rug is pulled from under the local authority. Even though the words "best indications" are used, there is nothing written in the statute to give the officer the confidence to proceed with the capital development.
I repeat that the Government do not do that. The hon. Member for Newark made it clear that business would not do so. One cannot imagine that a well-run manufacturing business or building development firm would operate on that annual capital basis. It would chase away an accountant who made such a suggestion for precisely the reasons that I put forward. Local authorities need not just one year but a number of years certainly in order to carry out the majority of their capital developments.
The other difficulty is that the Government, in part VIII of the Bill, are seeking to prevent local authorities from using rate money for capital projects. Money spent from revenue will be offset against the capital allocation. The authority may find itself on the horns of a dilemma. Even though the Government say that they will try to avoid it, a local authority could be precluded from spending from revenue in order to complete a necessary project. When I was a member of a local authority, we took pride in spending from revenue and not having to pay interest, and interest rates were then not as high as they are under this Government. The Government are seeking to put local authorities in a straitjacket purely for accounting reasons.
It is not good enough for the Minister to say that Government Departments will use their best endeavours to help local authorities. They are putting yet another severe constraint on them. Local authorities will be prevented from getting on with jobs for no good reason. When discussing part VI the Minister could argue that local authorities wanted a change from the needs element in the block grant. However, he cannot argue that local authorities complained of the capital expenditure provisions. The decision comes entirely from central Government.
I am disappointed that this modest amendment does not find favour with the Government. I can foresee chaos. Any Conservative Member who has knowledge of the construction industry knows the difficulties that a firm would have in trying to conform on an annual basis without knowing what the minimum limit will be for successive years. I cannot accept the Minister's undertaking that the Government will give the best indication that they can to local authorities.


Local authorities rightly want this modest amendment to be written into the Bill. They will then know where they and their officers stand when planning capital developments. I fear that we shall have to divide the House unless the Minister is prepared to accept at least the spirit of the amendment.

Mr. Wigley: The right hon. Member for Widnes (Mr. Oakes) referred to the interplay between amendment No. 137 and the later group headed by amendment No. 139. There is an interrelationship between them and I wish to raise a point with the Minister in the hope that we can reach an accommodation.
If a local authority gets involved in a capital programme that goes on for two or three years and projects run into difficulties through bad weather or for other reasons so that the authority cannot accommodate its capital programme in the following year because the Government are cutting capital expenditure, will the Government at least allow the authority to be able to take money from its revenue account to spend on capital projects in order to save them?
Two doors are being closed at the same time. One is the restriction to 12 months for a capital programme, and the other is that there is not the let-out of an authority's being able to fund a capital programme from its revenue account.
Capital expenditure is probably the most popular expenditure undertaken by local government. It represents something that ratepayers can see. Local authorities that fund capital expenditure partly from the rates can always carry the ratepayers with them. The money that ratepayers do not like spending is that which is lost on bureaucracy and for which they feel that they do not get value. There is invariably widespread support for capital projects, assuming that the council is reflecting what the people want.
I hope that, if the Minister cannot accept amendment No. 137 he will assure us that local authorities will be given flexibility to take money from their revenue accounts so that we do not get into a position in which some treasurers—and treasurers tend to be a little conservative and to look for an excuse for not doing things—have an excuse not to undertake any capital programmes be-

cause of the fear that they will be caught by the 12-month provision.
I hope that the Minister will give some indication of a let-out for local authorities that, through no fault of their own, get into a tangle and cannot constrain themselves within the finances that will be made available for a period of 12 months. I hope that we shall see some daylight on that issue, if not tonight at least in another place.

Mr. King: I must tell the right hon. Member for Widnes (Mr. Oakes) that the analogy that I used was a fair one. I am advised that the locally determined sanctions were tied to a single year. The right hon. Gentleman was not correct in saying that they were not tied in that way.
The hon. Member for Caernarvon (Mr. Wigley) is perhaps under the impression that there will not be any more capital expenditure. The amendment suggests that we should specify capital expenditure allocations for three years. The Labour Government tried to guarantee, on the basis of one year's sanction allocation, that local authorities could plan on a level of 80 per cent. of that allocation for the following year. For three consecutive years, the Labour Government had to withdraw that contingent approval because they were not able to implement it. We hope to do better.
We propose a different system of capital control. At present there is detailed control over local authority capital expenditure. It is exercised by borrowing and by the most painstaking project control in the regional offices of my Department. On the housing side, regional officers pore over endless detailed plans. We propose to get rid of all that unnecessary duplication of activity.
Local authorities have to take responsibility for their decisions. They have to live within their own judgments. Under the new system they will get capital allocations under the five blocks of expenditure that in their hands will become a single block. They will have something that local authorities never thought that they would get—100 per cent. virement between the various authorities. That is not an entirely fair point to make. It depends on the tier of authority, whether it is a county or


a district, exactly which services it provides—in other words, education, social services, transport, LDS and housing. That is the system that will operate. There will be the opportunity to vire or to carry forward 10 per cent. from one year allocation to the next, or the possibility of an overspend or an underspend. There will also be the opportunity to vire between different authorities not merely within the same area but throughout the country. Underspend allocations in one area can be taken up on a swap basis between different authorities.
10.15 pm
The Government are concerned about one thing—the totality of capital expenditure. The figure this year is some £2,500 million. The Government's proper concern is that this total should be preserved. We shall not maintain effective control of public expenditure if a programme of that magnitude is allowed to remain totally uncontrolled. We are determined, within that overall control, to introduce far greater flexibility than has existed to date. I cannot give a name, but in a private remark a distinguished member in local government said to me, "I never believed that the Government would give us this degree of freedom within the overall bracket." There will be total freedom for authorities, between the programmes, to determine their own priorities. This is a major step forward for people who believe in the freedom of local authorities to take their own decisions.
All capital receipts, with the exception of housing, are exempted from this control. This will encourage local authorities that wish to make new capital investment to recycle their funds to make the best use of resources available to them. Under the Labour Government, when council houses were sold, 100 per cent. of the credit was subsumed by the Treasury. Now, for the first time, 50 per cent. of council house sales will be available to assist capital expenditure for new projects by local authorities. There is a direct interest for local authorities to promote council house sales in their area because it will help to supplement their capital resources.

Mr. Alton: I wonder whether the Minister will clarify one point. It seems to me that this new freedom is in some ways illusory. The right hon. Gentleman says that the virement will exist between one block and another. It will surely still be accountable to the individual spending Ministry. It will still be for the Ministry to give approval for the schemes that will be embarked upon. This new freedom will not be a very good freedom if local authorities have not the money to spend that they possessed previously.

Mr. King: Whether we have this system or any other system, we cannot use resources that we have not got. We have to start with the amount of resources available. The hon. Gentleman is wrong. It is a single block. There is what is called a 100 per cent. virement. Spending Departments and service Departments will be interested in the spending patterns of different authorities. Our expectation is that, by and large, this will average out across authorities. In one authority, a school project may be held up by planning problems or access, and it may proceed with an old people's home, which it decides at that moment has higher priority. In another authority, that situation may be reversed. We shall monitor the situation to see what happens.
I know that the hon. Gentleman has some experience of local government. He cannot believe that this is what the Government intend to do. This is precisely what is in the Bill. It is the freedom that we intend to give local government. I warmly commend it to the House.

Mr. Oakes: Again the Minister has quoted the anonymous gentleman who says that he cannot believe that the Government would give local authorities so much power. Many other people do not believe it. The Conservative-controlled Merseyside county council and the Conservative-controlled Cheshire county council do not believe it. They have written to me on the matter.
I take the Minister's point about virement. If proposals are made by a local authority to build a school, I cannot believe that the Department of Education and Science will sit quietly by and allow the local authority to spend the money on


a road. I can imagine the chaos that would be caused.
I note what the Minister has said about virement. Another more important series of amendments is to be discussed on which it might be more appropriate to divide the House. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Fox: I beg to move amendment No. 138, in page 47, line 19, leave out subsection (2) and insert—
'(2) The Minister of Transport may specify an amount of prescribed expenditure in relation to any authority mentioned in section 58(1) above but it shall not be his duty to do so except in relation to a county council.'.
County councils are highway authorities and will, therefore, normally require expenditure allocations for transport. Most district councils and London boroughs, however, do not incur transport expenditure, so transport allocations will not normally be needed for them. The amendment makes it clear that, whereas the Minister of Transport has a duty to make expenditure allocations to county councils, he has the power to give an allocation to any authority to whom part VIII of the Bill applies.
Other Government amendments have the effect of removing the Greater London Council from the scope of part VIII of the Bill. The Minister of Transport will have neither the duty nor the power to make any allocation to the GLC whose capital expenditure on transport will continue to be controlled by the annual Money Bill procedure.

Amendment agreed to.

Mr. Oakes: I beg to move amendment No. 139, in page 47, line 36, leave out from 'receipts' to end of line 37.

Mr. Deputy Speaker: With this we may discuss the following amendments:

No. 140, in page 47, line 37, at end insert
'and
(e) an amount equal to the product of a rate of 2p in the £ for their area for the years.'.

No. 141, in page 47, line 37, at end insert—


'(e) an amount for the year equal to the product of a rate of 2p in the £ for their area; and

(f) any amount applied from funds established under S.29 of the Local Government (Miscellaneous Provisions) Act 1976; and
(g) any amount received by way of grant or loan from the EIB, ERDF; and
(h) any amount applied to capital purposes from the proceeds of local lotteries.'.

Mr. Oakes: The hon. Member for Caernarvon (Mr. Wigley) will agree that his amendment No. 140 does not go into as much detail as amendment No. 141.
We touched on this problem when discussing the previous amendment. It involves the inability of local authorities under part VIII to spend money from revenue on capital projects. If they spend such money, it is taken off the capital spending for the area.
In my day in local authorities—and the underlying economic situation is no different today—it was considered prudent for a local authority to spend out of revenue rather than borrow capital. I remember with pride that in the old authority of Widnes there was a bus department which was almost unique in that it made a good profit. We were told by Mr. Green, the then boorugh treasurer, who was a prudent man and a Lancashire man, that it had succeeded so well because we saved up to buy buses ourselves out of revenue, not out of capital. We did not need to borrow to buy buses. Many other local authorities in their wisdom and at their discretion could and should afford to pay for some projects out of revenue.
I can understand the Minister and his colleagues, with their constant fear of high public expenditure, thinking that some local authorities might go mad in such a situation and fund enormously expensive capital projects entirely on the backs of the ratepayers for a current year. That does not fit in with what the Government say about local authority freedom and allowing local authorities their head on this matter. Nevertheless, they may fear that.
This amendment is supremely modest It says that a local authority shall be allowed to spend an amount equal to the product of a rate of 2p in the pound for their area. That is a 2p rate to spend on a capital project. I doubt whether any amendment could be more modest. No authority will be able to go wild on that kind of expenditure of ratepayers' money.
A number of other items that should be taken into account include section 29


moneys under the Local Government Act and the moneys spent on capital projects from the proceeds of local lotteries. I do not see the right hon. Member for Crosby (Sir G. Page) in the Chamber, but I remember him introducing his Private Member's Bill. One of the clearest points in support of his Bill was that capital could be raised for many much needed items—on which local authorities could not otherwise spend capital—by using the local lottery. Moneys raised from a local lottery for capital purposes should be excluded from the provisions of part VIII of the Bill.
What I, the hon. Member for Caernarvon and the three united local authority associations are asking for is modest and entirely in accordance with the much proclaimed and much vaunted statement by the Government that they will allow local authorities a far greater degree of freedom in the conduct of their affairs. All right, let us test the Government. This is the most modest request for a degree of freedom for local authorities. We ask that a 2p rate should be spent on capital projects. That is all we ask. Surely the Government who believe so much and proclaim that belief in local authority freedom can agree with us.

Mr. Wigley: This amendment leads on from the last one that we discussed, since it relates to the flexibility of local authorities. As I said in the previous debate, the sort of projects that local authorities have funded through their revenue accounts, by putting 1p or 2p on the rates, have been amongst the most popular projects undertaken by local authorities.
In my area there is a scheme for a sports and leisure centre and swimming pool. It is to be funded by this method. That has been done after years of failure to provide an elementary service in the community. My area is a tourist centre and there is no swimming pool in the whole of my constituency. That is a reflection on standards. We have reached the point where councillors are saying that because of public pressures they are willing to put an incremental 1p or 2p on the rates in order to provide that facility. That is one of the justifications for our view. The other is the provision of flexibility. When things go wrong on capital projects,

whether as a result of timing or cost or whatever, there should be flexibility so that an authority may take money from the revenue account.
I ask the Minister a specific question. Am I right, in interpreting the Bill in relation to community councils in Wales, in thinking that they will be able to put 1p or 2p on the rates for capital purposes? If all the community councils within a district area are able to do that, will district councils and county councils be able to do the same so that we can overcome this problem in Wales? Will the Minister confirm that?

Mr. Eldon Griffiths: The amendment moved by the right hon. Member for Widnes (Mr. Oakes) is a wrecking amendment. It is not the widow's mite; it is the housemaid's baby. The right hon. Member knows perfectly well that what he is trying to do here is to escape control. Whether he likes it or not, that is the spirit Of the Bill, and he must recognise that his amendment to add 2p in the pound is simply a method of escape which contradicts the whole purpose of the clause.

Mr. King: The comments of my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) put the argument against the amendment very clearly indeed.
My answer to the hon. Member for Caernarvon (Mr. Wigley) is that parish councils and community councils are not covered; they are outside these capital allocation provisions.
The words that amendment No. 139 seeks to remove are an obvious safeguard that the Government must have. We have to protect the totality of capital expenditure against the coincidence in any one year of a massive amount of capital receipts from sales within local authorities. The value of those receipts will not be lost. Some of them may merely have to be phased into further years. It is obviously an essential safeguard. I doubt whether it will be necessary to use it, but if there were to be substantial capital sales which endangered the totality of the cash limit on capital expenditure it would have to be invoked.
Amendment No. 141 refers to a 2p rate and to investment by the EIB, the ERDF, or under section 29 of the Local


Government (Miscellaneous Provisions) Act 1976. As my hon. Friend the Member for Bury St. Edmunds indicated, these are all ways to try to stretch or to elasticise the cash limit. That is not possible.
The right hon. Member for Widnes (Mr. Oakes) suggested that this is a test of freedom. We give total freedom within our proposal. We do not mind if the funds are raised by a 2p rate. We do not mind how the funds are raised. No longer will there be the constraints under the borrowing powers within the totality of the allocation. It is a matter for the authority to decide how it raises the funds, whether it is by borrowing, through revenue or from capital receipts.
The right hon. Gentleman chided me just now about our belief in freedom. It was clear from the earlier debate that he still does not really believe that we shall give a 100 per cent. virement. He made clear that he could not conceive of circumstances in which such a thing would be possible. I can tell the right hon. Gentleman that it will happen, and it is for that reason that we have put a clear proposition to the House. We need to preserve the total of capital expenditure within the allocations, and we can-

not allow these extra deviations on top of the very significant concessions that we have already made.

I therefore hope that the House, in recognising the merits of our proposals, will reject these amendments.

Mr. Oakes: I did not say that I do not believe that the Government intend to do what they proclaim. My point is that I cannot believe that it can possibly work. I cited an example relating to schools and roads. If this virement starts to operate, we shall soon see the chaos and the cat fights that will result between different Departments.
It was suggested that this is a wrecking amendment to allow a local authority to use these tuppences and bits and pieces of expenditure on capital. When we consider the vast amounts of capital moneys spent by local authorities, it is absurd to suggest that it is a wrecking amendment.
What we see is an example of the tight screw of control that the central Government are imposing on local authorities in this country by means of the Bill. For that reason, I hope that my hon. Friends will support me in the Lobby.

Question put, That the amendment be made:—

The House divided: Ayes 236. Noes 292.

Division No. 394]
AYES
[10.34 pm


Abse, Leo
Cook, Robin F.
Fletcher, L. R. (Ilkeston)


Adams, Allen
Cowans, Harry
Fletcher, Ted (Darlington)


Allaun, Frank
Craigen, J. M. (Glasgow, Maryhill)
Foot, Rt Hon Michael


Alton, David
Crowther, J S.
Ford, Ben


Anderson, Donald
Cryer, Bob
Forrester, John


Archer, Rt Hon Peter
Cunliffe, Lawrence
Foster, Derek


Ashton, Joe
Cunningham, George (Islington S)
Fraser, John (Lambeth, Norwood)


Atkinson, Norman (H'gey, Tott'ham)
Dalyell, Tam
Freeson, Rt Hon Reginald


Bagler, Gordon A. T.
Davies, Ifor (Gower)
Garrett, John (Norwich S)


Barnett, Guy (Greenwich)
Davis, Clinton, (Hackney Central)
Garrett, W. E. (Wallsend)


Barnett, Rt Hon Joel (Heywood)
Davis, Terry (B'rm'ham, Stechford)
George, Bruce


Berth, A. J.
Deakins, Eric
Gilbert, Rt Hon Dr John


Bennett, Andrew (Stockport N)
Dean, Joseph (Leeds West)
Ginsburg, David


Bidwell, Sydney
Dempsey, James
Gourlay, Harry


Boothroyd, Miss Betty
Dewar, Donald
Graham, Ted


Bray, Dr Jeremy
Dixon, Donald
Grant, John (Islington C)


Brown, Hugh D. (Provan)
Dobson, Frank
Hamilton, James (Bothwell)


Brown, Robert C. (Newcastle W)
Dormand, Jack
Hamilton, W. W. (Central Fife)


Brown, Ronald W. (Hackney S)
Douglas, Dick
Harrison, Rt Hon Walter


Brown, Ron (Edinburgh, Leith)
Douglas-Mann, Bruce
Hart, Rt Hon Dame Judith


Buchan, Norman
Dubs, Alfred
Hattersley, Rt Hon Roy


Callaghan, Rt Hon J. (Cardiff SE)
Duffy, A. E. P.
Haynes, Frank


Callaghan, Jim (Middleton &amp; P)
Dunnett, Jack
Healey, Rt Hon Denis


Campbell, Ian
Dunwoody, Mrs Gwyneth
Heffer, Eric S.


Campbell-Savours, Dale
Eastham, Ken
Hogg, Norman (E Dunbartonshire)


Canavan, Dennis
Edwards, Robert (Wolv SE)
Holland, Stuart (L'beth, Vauxhall)


Carmichael, Neil
Ellis, Raymond (NE Derbyshire)
Home Robertson, John


Carter-Jones, Lewis
Ellis, Tom (Wrexham)
Homewood, William


Cartwright, John
English, Michael
Hooley, Frank


Clark, Dr David (South Shields)
Ennals, Rt Hon. David
Horam, John


Cocks, Rt Hon Michael (Bristol S)
Evans, Ioan (Aberdare)
Howells, Geraint


Cohen, Stanley
Evans, John (Newton)
Hudson Davies, Gwilym Ednyfed


Coleman, Donald
Faulds, Andrew
Hughes, Mark (Durham)


Concannon, Rt Hon J. D.
Field, Frank
Hughes, Robert (Aberdeen North)


Conlan, Bernard
Flannery, Martin
John, Brynmor




Johnson, Walter (Derby South)
Morton, George
Snape, Peter


Jones, Rt Hon Alec (Rhondda)
Moyle, Rt Hon Roland
Soley, Clive


Jones, Barry (East Flint)
Newens, Stanley
Spearing, Nigel


Jones, Dan (Burnley)
Oakes, Rt Hon Gordon
Spriggs, Leslie


Kaufman, Rt Hon Gerald
Ogden, Eric
Stallard, A. W.


Kerr, Russell
O'Halloran, Michael
Steel, Rt Hon David


Kilfedder, James A.
O'Neill, Martin
Stoddart, David


Kilroy-Silk, Robert
Orme, Rt Hon Stanley
Stott, Roger


Kinnock, Neil
Paisley, Rev Ian
Strang, Gavin


Lambie, David
Palmer, Arthur
Straw, Jack


Lamborn, Harry
Park, George
Summerskill, Hon Dr Shirley


Leadbitter, Ted
Parker, John
Taylor, Mrs Ann (Bolton West)


Leighton, Ronald
Parry, Robert
Thomas, Jeffrey (Abertillery)


Lewis, Arthur (Newham North West)
Pavitt, Laurie
Thomas, Mike (Newcastle East)


Lewis, Ron (Carlisle)
Pendry, Tom
Thomas, Dr Roger (Carmarthen)


Litherland, Robert
Penhaligon, David
Thorne, Stan (Preston South)


Lofthouse, Geoffrey
Powell, Raymond (Ogmore)
Tilley, John


Lyon, Alexander (York)
Price, Christopher (Lewisham West)
Torney, Tom


Lyons, Edward (Bradford West)
Race, Reg
Urwin, Rt Hon Tom


McElhone, Frank
Radice, Giles
Varley, Rt Hon Eric G.


McGuire, Michael (Ince)
Rees, Rt Hon Merlyn (Leeds South)
Wainwright, Edwin (Dearne Valley)


McKay, Allen (Penistone)
Roberts, Allan (Bootle)
Walker, Rt Hon Harold (Doncaster)


McKelvey, William
Roberts, Ernest (Hackney North)
Watkins, David


MacKenzie, Rt Hon Gregor
Roberts, Gwilym (Cannock)
Weetch, Ken


Maclennan, Robert
Robertson, George
Wellbeloved, James


McNally, Thomas
Robinson, Geoffrey (Coventry NW)
White, James (Glasgow, Pollok)


McNamara, Kevin
Robinson, Peter (Belfast East)
Whitehead, Phillip


McQuade, John
Rodgers, Rt Hon William
Whitlock, William


McWilliam, John
Rooker, J. W.
Wigley, Dafydd


Magee, Bryan
Roper, John
Willey, Rt Hon Frederick


Marks, Kenneth
Ross, Ernest (Dundee West)
Williams, Rt Hon Alan (Swansea W)


Marshall, David (Gl'sgow.Shettles'n)
Ross, Stephen (Isle of Wight)
Williams, Sir Thomas (Warrington)


Marshall, Jim (Leicester South)
Rowlands, Ted
Wilson, Gordon (Dundee East)


Martin, Michael (Gl'gow, Springb'rn)
Ryman, John
Wilson, William (Coventry SE)


Maxton, John
Sandelson, Neville
Winnick, David


Maynard, Miss Joan
Sever, John
Woodall, Alec


Mellish, Rt Hon Robert
Sheldon, Rt Hon Robert (A'ton-u-L)
Woolmer, Kenneth


Mikardo, Ian
Shore, Rt Hon Peter (Step and Pop)
Wrigglesworth, Ian


Millan, Rt Hon Bruce
Short, Mrs Renée
Wright, Sheila


Miller, Dr M. S. (East Kilbride)
Silkin, Rt Hon John (Deptford)
Young, David (Bolton East)


Mitchell, Austin (Grimsby)
Silkin, Rt Hon S. C. (Dulwich)



Mitchell, R. C. (Soton, Itchen)
Silverman, Julius
TELLERS FOR THE AYES:


Morris, Rt Hon Alfred (Wythenshawe)
Skinner, Dennis
Mr. James Tinn and Mr. Hugh McCartney


Morris, Rt Hon Charles (Openshaw)
Smith, Rt Hon J (North Lanarkshire)



Morris, Rt Hon John (Aberavon)




NOES


Adley, Robert
Buchanan-Smith, Hon Alick
Eyre, Reginald


Aitken, Jonathan
Buck, Antony
Fairbairn, Nicholas


Alexander, Richard
Budgen, Nick
Faith, Mrs. Sheila


Allson, Michael
Bulmer, Edmond
Farr, John


Amery, Rt Hon Julian
Burden, F. A.
Fell, Anthony


Ancram, Michael
Butcher, John
Fenner, Mrs Peggy


Arnold, Tom
Butler, Hon Adam
Finsberg, Geoffrey


Atkins, Robert (Preston North)
Cadbury, Jocelyn
Fisher, Sir Nigel


Baker, Nicholas (North Dorset)
Carlisle, John (Luton West)
Fletcher, Alexander (Edinburgh N)


Banks, Robert
Chalker, Mrs. Lynda
Fletcher-Cooke, Charles


Beaumont-Dark, Anthony
Channon, Paul
Fookes, Miss Janet


Bell, Sir Ronald
Churchill, W. S.
Forman, Nigel


Bendall, Vivian
Clark, Hon Alan (Plymouth, Sutton)
Fowler, Rt Hon Norman


Benyon, Thomas (Abingdon)
Clark, Sir William (Croydon South)
Fox, Marcus


Benyon, W. (Buckingham)
Clarke, Kenneth (Rushcliffe)
Fraser, Rt Hon. H. (Stafford &amp; St)


Best, Keith
Clegg, Sir Walter
Fraser, Peter (South Angus)


Bevan, David Gilroy
Cockeram, Eric
Galbraith, Hon T. G. D.


Biffen, Rt Hon John
Colvin, Michael
Gardiner, George (Relgate)


Biggs-Davison, John
Cope, John
Gardner, Edward (South Fylde)


Blackburn, John
Corrie, John
Garel-Jones, Tristan


Blaker, Peter
Costain, A. P.
Glyn, Dr. Alan


Body, Richard
Cranborne, Viscount
Goodhart, Philip


Bonsor, Sir Nicholas
Critchley, Julian
Goodhew, Victor


Boscawen, Hon Robert
Dean, Paul (North Somerset)
Goodlad, Alastair


Bottomley, Peter (Woolwich West)
Dickens, Geoffrey
Gorst, John


Bowden, Andrew
Dorrell, Stephen
Gow, Ian


Boyson, Dr Rhodes
Douglas-Hamilton, Lord James
Grant, Anthony (Harrow C)


Braine, Sir Bernard
Dover, Denshore
Gray, Hamish


Bright, Graham
Dunlop, John
Greenway, Harry


Brinton, Tim
Dunn, Robert (Dartford)
Grieve, Percy


Brittan, Leon
Durant, Tony
Griffiths, Eldon (Bury St. Edmonds)


Brooke, Hon Peter
Dykes, Hugh
Griffiths, Peter (Portsmouth N)


Brotherton, Michael
Eden, Rt Hon Sir John
Grist, Ian


Brown, Michael (Brigg &amp; Sc'thorpe)
Edwards, Rt Hon N. (Pembroke)
Gummer, John Selwyn


Browne, John (Winchester)
Eggar, Timothy
Hamilton, Hon Archie (Eps'm&amp;Ew'll)


Bruce-Gardyne, John
Elliott, Sir William
Hamilton, Michael (Salisbury)


Bryan. Sir Paul
Emery, Peter
Hampson, Dr Keith







Hannam, John
Mawhinney, Dr Brian
Shepherd, Colin (Hereford)


Haselhurst, Alan
Maxwell-Hyslop, Robin
Shepherd, Richard (Aldridge-Br'hills)


Havers, Rt Hon Sir Michael
Mayhew, Patrick
Shersby, Michael


Hawkins, Paul
Mellor, David
Silvester, Fred


Hawksley, Warren
Meyer, Sir Anthony
Sims, Roger


Hayhoe, Barney
Miller, Hal (Bromsgrove &amp; Redditch)
Skeet, T H. H.


Heddle, John
Mills, Iain (Meriden)
Smith, Dudley (War. and Leam'ton)


Henderson, Barry
Mills, Peter (West Devon)
Speller, Tony


Heseltine, Rt Hon Michael
Miscampbell, Norman
Spence, John


Hicks, Robert
Mitchell, David (Basingstoke)
Spicer, Michael (S Worcestershire)


Higgins, Rt Hon Terence L.
Moate, Roger
Sproat, Iain


Hill, James
Monro, Hector
Squire, Robin


Hogg, Hon Douglas (Grantham)
Montgomery, Fergus
Stanbrook, Ivor


Holland, Philip (Carlton)
Morris, Michael (Northampton, Sth)
Stanley, John


Hooson, Tom
Morrison, Hon Charles (Devizes)
Steen, Anthony


Hordern, Peter
Morrison, Hon Peter (City of Chester)
Stevens, Martin


Howell, Rt Hon David (Guildford)
Murphy, Christopher
Stewart, Ian (Hitchin)


Howell, Ralph (North Norfolk)
Myles, David
Stewart, John (East Renfrewshire)


Hunt, David (Wirral)
Neale, Gerrard
Stokes, John


Hunt, John (Ravensbourne)
Needham, Richard
Stradling Thomas, J.


Irving, Charles (Cheltenham)
Nelson, Anthony
Tapsell, Peter


Jenkin, Rt Hon Patrick
Neubert, Michael
Taylor, Robert (Croydon NW)


Jessel, Toby
Newton, Tony
Taylor, Teddy (Southend East)


Johnson Smith, Geoffrey
Onslow, Cranley
Tebbit, Norman


Jopling, Rt Hon Michael
Oppenheim, Rt Hon Mrs Sally
Temple-Morris, Peter


Joseph, Rt Hon Sir Keith
Osborn, John
Thomas, Rt Hon Peter (Hendon S)


Kimball, Marcus
Page, John (Harrow, West)
Thompson, Donald


King, Rt Hon Tom
Page, Rt Hon Sir R. Graham
Thorne, Neil (Ilford South)


Kitson, Sir Timothy
Page, Richard (SW Hertfordshire)
Thornton, Malcolm


Knight, Mrs Jill
Parkinson, Cecil
Townend, John (Bridlington)


Knox, David
Parris, Matthew
Townsend, Cyril D. (Bexleyheath)


Lamont, Norman
Patten, Christopher (Bath)
Trippier, David


Lang, Ian
Patten, John (Oxford)
Trotter, Neville


Langford-Holt, Sir John
Pattie, Geoffrey
Vaughan, Dr. Gerard


Latham, Michael
Pawsey, James
Viggers, Peter


Lawrence, Ivan
Percival, Sir Ian
Waddington, David


Lawson, Nigel
Peyton, Rt Hon John
Wakeham. John


Lee, John
Pink, R. Bonner
Waldegrave, Hon William


Lennox-Boyd, Hon Mark
Pollock, Alexander
Walker, Bill (Perth &amp; E Perthshire)


Lewis, Kenneth (Rutland)
Porter, George
Walker-Smith, Rt Hon Sir Derek


Lloyd, Ian (Havant &amp; Waterloo)
Prentice, Rt Hon Reg
Wall, Patrick


Lloyd, Peter (Fareham)
Price, David (Eastleigh)
Walters, Dennis


Loveridge, John
Prior, Rt Hon James
Ward, John


Luce, Richard
Proctor, K. Harvey
Warren, Kenneth


McCrindle, Robert
Ralson, Timothy
Watson, John


Macfarlane, Neil
Rathbone, Tim
Wells, John (Maidstone)


MacGregor, John
Rees, Peter (Dover and Deal)
Wells, Bowen (Hert'rd &amp; Stevn'age)


Mackay, John (Argyll)
Rees-Davies, W. R.
Wheeler, John


Macmillan, Rt Hon M. (Farnham)
Renton, Tim
Whitelaw, Rt Hon William


McNair-Wilson, Michael (Newbury)
Rhodes James, Robert
Whitney, Raymond


McNair-Wilson, Patrick (New Forest)
Ridley, Hon Nicholas
Wickenden, Keith


McQuarrie, Albert
Ridsdale, Julian
Wilkinson, John


Madel, David
Rifkind, Malcolm
Williams, Delwyn (Montgomery)


Major, John
Roberts, Wyn (Conway)
Winterton, Nicholas


Marland, Paul
Rossl, Hugh
Wolfson, Mark


Marlow, Tony
Rost, Peter
Young, Sir George (Acton)


Marshall, Michael (Arundel)
Sainsbury, Hon Timothy
Younger, Rt Hon George


Marten, Neil (Banbury)
St. John-Stevas, Rt Hon Norman



Mates, Michael
Scott, Nicholas
TELLERS FOR THE NOES:


Mather, Carol
Shaw, Giles (Pudsey)
Mr. Spencer Le Marchant and Mr. Anthony Berry


Maude, Rt Hon Angus
Shaw, Michael (Scarborough)



Mawby, Ray
Shelton, William (Streatham)



Question accordingly negatived.

Mr. Fox: I beg to move amendment No. 142, in page 47, line 39, at end add—
'(3A) For the purpose of determining whether a payment was authorised under subsection (3) above the amount of the net capital receipts of the authority who made the payment shall be ascertained on 31st March in the year in which the payment was made.
(3B) In this section "net capital receipts", in relation to any year, means the receipts of an authority which by virtue of section 62(1) below are capital receipts for the purposes of this Part of this Act, as reduced by any payment in a previous year which was authorised by subsection (2) (d) above.'.

Mr. Deputy Speaker: With this we may take the following amendents:

Government amendment Nos. 143 and 144.

Amendment No. 145, in clause 62, page 49, line 6, leave out subsection (4).

Government amendment No. 146.

Amendment No. 145, in clause 62, page 49, line 22, at end insert—
'(5) For the purposes of this Section, there is a disposal of an interest in or right over property mentioned in subsection (2) above when an authority ceases to be entitled under the contract concerned to the immediate or future use of the property.'.

Mr. Fox: Amendment No. 142 is a technical amendment that clarifies the treatment of payments under clause 59 (3)(d)—payments that local authorities are entitled to make by virtue of their capital receipts. The amendent provides that an authority will be free to make payments in anticipation of capital receipts that will arise before the end of the financial year in which the payments are made. An authority will be free to use capital receipts in any year to cover payments in excess of its allocation for that year. Once it has done so, the capital receipts concerned will not be available to cover payments over and above the allocation made for a future year.
With regard to amendment No. 143, on the date when this part of the Bill comes into effect—the commencement date, which will probably be 1 April 1981—each local authority will have capital receipts that will have arisen before that date. Some of those receipts will have been spent on paying off debts or on financing capital expenditure. Others will not have been spent but kept in reserve. We intend that authorities should be able to spend, over and above their allocation, an amount equal to whatever capital receipts are left unspent by the commencement date. In addition to that amount, authorities will be free to supplement their allocations each year by an amount equal to capital receipts arising after the commencement date, irrespective of whether the receipts have been spent.
Other Government amendments provide that for the purpose of this part of the Bill an authority's capital receipts will be treated as reduced to the extent that they will be used to cover expenditure in excess of allocations in previous years.
With regard to amendment No. 144, under clause 67, where an authority acquires an interest in land or goods without becoming the outright owner of the capital asset involved, an amount equal to capital value of the asset will be charged against its expenditure allocation. This amendment fulfils the promise that we made in Committee to provide that where an authority acquires such an interest and later disposes of its right to occupy or use the land or goods concerned the authority will effectively be credited with a capital receipt when it disposes of its interest. The effect of the

amendment will be to remove any obstacle that the Bill might have put in the way of an authority wishing to take on the head lease of an industrial estate or to sublet individual factory units to private users.
On amendment No. 145, under clause 59 the Minister is empowered to prescribe what proportion of its net capital receipts an authority may use to supplement its approved expenditure allocation. It is envisaged that authorities will generally be free to supplement their allocations by the use of all their capital receipts that remain unspent. The only exception will be that 50 per cent. of certain housing capital receipts may be used to supplement an authority's allocation. This is because of the scale of the receipts likely to be involved, especially in respect of the disposal of council houses.
So far as national public expenditure plans are concerned, the remaining 50 per cent. will be used to increase housing allocations to local authorities generally, since the areas with the greatest housing need will not necessarily be those which have the biggest housing receipts. So far as the individual authority is concerned, the remaining 50 per cent. will as now, be available to fund expenditure within approved ceilings.
In the absence of a flexible power to control the extent to which authorities will be able to supplement their expenditure allocations by the use of capital receipts, the Government's only means of preventing an overspend against the national cash limit could be to reduce basic allocations to allow for the use of capital receipts. This could be unfair on authorities which, perhaps through no fault of their own, have the least accumulated capital receipts. For this reason, we would prefer to keep the power to vary the proportion of capital receipts which can be used to supplement basic expenditure allocations.
As regards amendment No. 146, in response to an amendment proposed in Committee we agreed that certain receipts not arising from the disposal of assets or the repayment of grants and advances should be treated as capital receipts for the purposes of this part of the Bill. The amendment put forward in Committee, and afterwards withdrawn, concerned receipts arising from any


agreement made under section 52 of the Town and Country Planning Act 1971. I do not need to tell the House what a section 52 agreement is. However, receipts under section 52 are not the only other payments which might be treated as capital receipts for the purposes of capital expenditure control. Compensation payments by contractors and insurance payments, for example, should have similar treatment. This amendment will enable the Secretary of State to make regulations to provide that all these receipts should be treated as capital receipts for the purposes of this part of the Bill.
Amendment No. 147 purports to provide that where an authority disposes of a leasehold interest in land it will be treated as gaining a capital receipt equal to the capital value of the land. We are fully in sympathy with the aims of the amendment. In fact, we ourselves have tabled Government amendment No. 144, which will achieve the same objective as this amendment. Amendment No. 147 is technically defective. Therefore, I should be grateful if Opposition Members would agree not to move it, in favour of amendment No. 144.

Mr. Eldon Griffiths: My hon. Friend the Under-Secretary has struck exactly the right balance in allowing authorities to have 50 per cent. of their capital receipts, notably from the sale of council houses. It is an incentive and an encouragement for them to sell those houses to the tenants who want them. Additionally, that money can and will be used in all sensible authorities to provide those one-bedroom and two-bedroom homes which are so badly needed by the elderly, and which, as elderly people move into them, will free under-occupied three-bedroom council houses to help those who are still on the waiting list.
Last Saturday I had the pleasure to hand over the deeds for the 150th council house sold in the small overspill town of Haverhill in my constituency, which is ne of some 600 that we have successfully sold in St. Edmundsbury district council area. The district council has netted about £6 million of capital assets. I am confident that this relatively small rural district will raise that figure to about 1,000 houses and £10 million

worth of assets before long. The council will be able to enjoy 50 per cent.—half the total sum—and will be able to utilise it at its discretion in the wide field of housing.
That demonstrates the good sense of selling council houses and that my right hon. Friend the Secretary of State has struck the right balance. He has allowed councils to have 50 per cent. of those assets, while using the other 50 per cent. for the balance of aggregate expenditure of other local authorities. I congratulate him on the measure.

Amendment agreed to.

Clause 62

CAPITAL RECEIPTS

Amendments made: No. 143, in page 48, line 36, leave out subsection (1) and insert—
'(1) Subject to the following provisions of this section and to any regulations under subsection (4) below, for the purposes of this Act an authority's capital receipts are equal—

(a) to any sums received by the authority before the commencement date in respect of the disposals and repayments mentioned in subsection (2) and (3) below, less the amount spent by the authority before that date out of any such sums (for whatever purpose); and
(b) to any sums received by the authority on or after the commencement date in respect of those disposals and repayments, without any deduction.'.

No. 144, in page 49, line 5, at end add—
'(3A) Where—

(a) the authority dispose—

(i) of an interest in land which confers a right to occupy the land but is not a freehold interest, or
(ii) of an interest in goods other than the property in them; or

(b) any such interest belonging to the authority comes to an end by any means, there shall be included in the capital receipts of the authority a sum equal to the amount which under section 67 below the authority would have been taken to have paid for the acquisition of the interest if it had acquired it at the date when it disposed of it or when the interest came to an end.'.

No. 146, in page 49, line 22, at end add—
'(e) that sums which are not capital receipts for the purposes of this Part of this Act by virtue of subsection (1) above shall be capital receipts for those purposes'.—[Mr. Fox.]

Clause 67

VALUATION ETC.

Mr. Fox: I beg to move amendment No. 313, in page 51, line 22, at end add—
'(3A) This subsection applies where—

(a) the acquisition is of a leasehold interest in land; and
(b) it is intended at the time of the acquisition that some person shall erect a building on the land for the authority.

(3B) Where subsection (3A) above applies, the authority shall be taken to make—

(a) on 31st March following the acquisition, a payment of an amount equal to the total value of any work carried out in respect of the building since the acquisition; and
(b) on 31st March in each subsequent year, a payment of an amount equal to the difference between the total value of any work carried out by that date in respect of the building and the total value of any work carried out in respect of it by 31st March in the previous year.

(3C) Any amount which by virtue of subsection (3B) above an authority are to be taken to pay in respect of an acquisition is in addition to any amount calculated in accordance with subsection (3) above which they are to be taken to pay in respect of that acquisition.'.

Subsection (1) and (13) of clause 67 provide that where an authority acquires a leasehold interest in land it will be regarded as acquiring the land at the time when it becomes entitled under a contract to the immediate or future use of or right over the land, and as making a payment equal to the capital value of the land at the time of acquisition. Here, with lease and lease-back building schemes, payment for the building is normally spread over the construction period.
The amendment is designed to ensure that those payments are reflected in presumed expenditure. It provides that where an authority takes the lease of a piece of land which it intends to have developed for its own use its expenditure allocation will be charged with the capital value of the undeveloped land at the time of acquisition, and then, in addition, with the value of the work as it is carried out.

Amendment agreed to.

Clause 69

PART VIII—SUPPLEMENTARY

Mr. Fox: I beg to move amendment No. 150, in page 53, line 3, at end add—
'(1A) In this Part of this Act—
"the commencement date" means the day appointed under subsection (1) above; and "year" means a period of 12 months beginning with 1st April.'.

This amendment defines the commencement date and year for the purposes of this part of the Bill. It is consequential on amendments No. 142 and 143. The latter introduce a distinction between capital receipts arising before the day when this part of the Bill comes into effect and those arising on or after that date. The definition of year for the purpose of this part of the Bill is to be the same as that laid down in clause 55(1) for the purposes of part VI on the RSG.

Amendment agreed to.

Mr. Deputy Speaker (Mr. Bernard Weatherill): Government amendment No. 151 was discussed with new clause 5 last week.

Amendment made: No. 151, in page 53, line 4, leave out subsection (2).—[Mr. Fox.]

Clause 70

DISTRIBUTION OF PLANNING FUNCTIONS BETWEEN PLANNING AUTHORITIES

Mr. Fox: I beg to move amendment No. 153, in page 54, line 37, leave out 'matter")' and insert
'matter")—
(a) the following sub-paragraphs shall be inserted after sub-paragraph (c):—
(ca) the use of land for any purpose required in connection with the transport by rail or water of aggregates (that is to say, any of the following, namely—

(i) sand and gravel;
(ii) crushed rock;
(iii) artificial materials of appearance similar to sand, gravel or crushed rock and manufactured or otherwise derived from iron or steel slags, pulverised fuel ash, clay or mineral waste),

or the erection of any building, plant or machinery which it is proposed to use in connection therewith;
(cb) the erection of any building, plant or machinery which it is proposed to use for the coating of roadstone or the production of concrete or of concrete blocks or pipes,


where the building, plant or machinery is to be erected in or on land which forms parts of or adjoins a site used or proposed to be used—

(i) for the winning and working of minerals; or
(ii) for any of the purposes mentioned in paragraph (ca) above;" and

(b)'.

We now turn to that part of the Bill concerned with planning. The amendment give effect to the Government's commitment as part of the measures to reallocate planning functions, to provide for some additional county matters, namely, rail aggregate depots, marine aggregate wharves and aggregates processing plant. Aggregates are not defined elsewhere in the planning legislation, and the new paragraph (ca) defines aggregates as sand, gravel, crushed rock and artificial aggregates used as substitutes for them, which are normally made from industrial or mineral waste.

11 p.m.

The new subparagraph (cb) defines the class of aggregate processing plant that is to become a county matter. The erection of any such plant will be a county matter only where the plant is located at the site of mineral extraction or at a rail aggregate depot or a marine aggregates wharf. This is to avoid the inclusion in the category of county matters operations which happen to involve aggregates but are divorced from sites in respect of which there arises strategic considerations requiring the particular expertise of county planning departments in minerals matters and strategic planning.

Hon. Members will appreciate that these definitions are a very tricky matter. We do not want to include in a county's responsibilities things which are of no immediate significance to the range of policies for minerals in its area. At the same time, we do not want strict responsibilities for development which, from the applicant's point of view, are part of the same process. We arrived at this definition after consultations with the local authority associations concerned, and with representatives of the minerals industry. These discussions are continuing and I would not want to rule out the possibility of further amendment of the Bill at a later stage if that were desirable.

Amendment agreed to.

Mr. Fox: I beg to move amendment No. 154, in page 54, line 41, leave out subsection (4) and insert—
'(4) Nothing in the general transfer provisions shall prevent a county planning authority determining an application to which this subsection applies after the commencement date if it was made before that date.
(4A) Subsection (4) above applies to any application which relates to a transferred matter and which is of a description mentioned in paragraph 15(1)(a), (b) or (c) of Schedule 16 to the Local Government Act 1972.'.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 156 and 241.

Mr. Fox: These three amendments are technical, and therefore it is not necessary for me to go into considerable detail.

Amendment agreed to

Mr. Charles Morrison: I beg to move amendment No. 155, in page 55, line 2, at end insert—
'(4A) The following subsections shall be substituted for subsections (1) to (3) of section 35 of the Town and Country Planning Act 1971:—

"(1) The Secretary of State may give directions requiring applications for planning permission, or for the approval of any local planning authority required under a development order,

(a) to be referred to him instead of being dealt with by local planning authorities, or
(b) to be referred to the county planning authority instead of being dealt with by the district planning authority.

(2) A direction under this section—

(a) may be given either to a particular local planning authority or to local planning authorities generally; and
(b) may relate either to a particular application or to applications of a class specified in the direction.


(3) (a) any application in respect of which a direction under this section has effect shall be referred to the Secretary of State or county planning authority accordingly.
(b) any application referred to the county planning authority under this section shall be dealt with by them as if it were a county matter.".'

I wish to make it clear that I am not questioning the basic intention of clause 70 in relation to the distribution of planning functions, but there are two questions behind this amendment. First, do the Government still believe in structural plans, and do they believe that they should be upheld? Secondly, given the Government's proper determination to contain public expenditure, do they wish to ensure that there are no loopholes


that would allow unforeseen public expenditure to occur?

On the first question, I think that we can take it that the Government continue to believe in structural plans because both the Secretary of State and the Minister have said so on a number of occasions. Therefore, I think that we can assume that the Government want the provisions of the structure plans which have been agreed to be upheld. That must be entirely sensible, because the plans are not only concerned with land use but—and perhaps this is of greater importance—are statements of resources which a county is able to make available for the provision of infrastructure. In consequence, they are a means of co-ordinating the investment decisions of other public bodies.

However, in their desire to redistribute planning functions between county and district, in order to meet the objectives of speeding up and simplifying planning procedures, the Government have had to face the problem of how to reform development control for which districts are responsible without undermining the agreed practices of the structure plans and without adding to complications and bureacuracy.

In drafting the Bill, the Government believe that they have dealt adequately with those problems and safeguarded structure plans. Unfortunately, few others agree. Among those who do not believe that structure plans have been safeguarded are the Confederation of British Industry, the British Property Federation, the Country Landowners' Association, the National Farmers' Union, the Royal Institution of Chartered Surveyors, the Council for the Protection of Rural England, the Royal Town Planning Institute, the Town and Country Planning Association and the National Housing and Town Planning Association. In addition, there is the Association of County Councils. It may be suggested that that association cannot be entirely objective in its judgment. However, it is hard to believe that the other organisations are not being objective or that they are all wrong.

There are two possible types of breach of structure plans. First, a district council could blatantly and wilfully set out

to ignore the provisions of the structure plan. A district council, acting in breach of the structure plan, would not only create difficulties over the costs of provision of infrastructure by the county; it would be acting in an extremely selfish manner towards other district councils in the county area. That is important. The structure plan, designed by the county, mulled over, thought about, subjected to the public comment and ultimately agreed by the Secretary of State, is an attempt within a county to provide a balance of development, having regard to the needs and requirements of the different parts of a county area. If a district council took upon itself the right to act in breach of that structure plan, it could create costs to the disadvantage of other districts, given the limits on capital expenditure. Alternatively, it could put the county in the position in which, perforce, it has to spend more capital on infrastructure than technically it is allowed to do. It is mercifully rare for a district council to wish to act in breach of the structure plan. The vast majority wish to act responsibly.

Secondly, there are not infrequent occasions when there is a genuine difference of opinion between county and district on the interpretation of the structure plan. When there is such a genuine difference of opinion, the district council could again decide to go its own way, which would give rise to extra costs, create worry for the county and difficulties for other districts.

What can be done?

It has been pointed out that the statutory formulation that a district has merely to have regard to the structure plan would make it difficult for any case brought by a county to be sustained in court. On the other hand, the Secretary of State has a long-stop position built into the Bill with the departure procedure.
The Secretary of State has said that he is not willing to depart from that because it would mean duplication and delay. But, under the system that the Bill proposes, not only will departures have to be considered in Whitehall; district will have to consult counties, and Whitehall will also consult counties before making a decision.

If the long-stop procedure were used, the Secretary of State could ultimately


order revocation, a fact of which the Minister made great play in Committee. He said that he would not hesitate to order revocation. That is excellent. It is encouraging to those who will ultimately be responsible for upholding the structure plan. However, I am concerned not with what my right hon. Friend says but with the law that he is attempting to pass. Without amendment, the Bill will be deficient. The Secretary of State may put one interpretation on the law and apply it as he has promised, but a future Secretary of State may take a different view—and we are legislating not just for the present Secretary of State but for his successors.

I tabled two amendments to try to cope with the problems that I have raised—No. 157, which was not selected, and No. 155. I regret that No. 157 was not selected because it would have insisted on a structure plan being upheld by district councils and would have coped with most of the problems.

Amendment No. 155 provides a new long-stop procedure. It provides, in effect, that the long-stop can be either the Secretary of State, as at present, or the county council. The Government have left themselves a long-stop position through the departure procedure to deal with certain cases where things are going wrong, but the exercise of calling in by the Secretary of State is contrary to the Government's intention to devolve powers to the right level. It sets the control several stages removed from the scene of events and there would be considerable implications for increased public expenditure in terms of the resources that the Department of the Environment would require to deal with relatively detailed cases. In any case too many matters which have connections with local government are already decided in Whitehall.

The county council is the strategic planning authority. Once the structure plan has been approved by the Secretary of State, the county council, as the democratically elected body, should be entrusted to deal with departures from the plan. It would be more economical if the Secretary of State's departure powers were supplemented by a power, in appropriate circumstances, for applications to

be referred to a county planning authority. for consideration and decision.

At present, once an application has been called in by the Secretary of State it must be determined by him, even if it becomes apparent that the application could be determined by the county planning authority. The ability to delegate to a county council is a valuable and worth-while option which could lead to a reduction in the use of departmental resources. My amendment provides such powers.

It must be right for the Government to try to contain public expenditure. If the Government do not accept my amendment, they will let themselves in for an increase in expenditure on planning procedures and they will let counties in for unplanned infrastructure costs.

The Minister is much too optimistic about the Bill's provisions. If it is passed unamended, the Minister is asking for trouble between county councils and district councils. It is tedious and self-righteous to say "I told you so", but some of us served on the Committee on the Local Government Act 1972. I remember well the rows about the provisions for planning functions. I also remember only too well how the Front Bench, upon which sat the present Secretary of State for the Environment, was convinced that it was right and would not listen to Back-Bench Members' advice. One of the reasons why the Bill is before us today is that the Government did not take the advice given to them from the Back Benches.

I hope that on this occasion the Government will have greater regard for our advice. If they do, they are more likely to provide a lasting and sensible solution to the problems. That means the redistribution of powers, backed up by provisions to ensure that the structure plan is upheld and that there is a reasonable understanding between the districts and counties about who is responsible for what.

Mr. Rippon: My hon. Friend the Member for Devizes (Mr. Morrison) has shown that, in its peculiar way, this part of the Bill is as complex and difficult as the financial provisions. I regret that we should be considering such important matters at this time of night. In some respects this part of the Bill should be in a separate Bill. It would have been


better if planning matters had been dealt with in a more conventional way. But while the rolling up of all these subjects into a long and complex Bill—it had 210 pages when we started it and it has now 234 pages, having been through Committee—may indicate a laudable bid to save parliamentary time, it certainly is not calculated to result in good law.
My hon. Friend the Member for Devizes said that the Bill, if passed without amendment, would be deficient—in other words, it would be bad. Certainly the controversy over the new financial arrangements between central Government and local government has tended to overshadow the proposed changes in planning law and practice. Whatever else may be said about this part of the Bill, it is a long way from achieving creative rather than obstructive planning.
Although I do not wish to say too much at this time of night about the allocation of planning functions, it is the difficulty of making a proper and sensible allocation of functions between the county councils and the district councils that led my hon. Friend to put down his amendments. The Bill as it stands will create a degree of confusion hardly yet imagined.
I simply cannot understand why the Government should have introduced a Bill making these changes—for example, the repeal of the power of a county planning authority to give directions to the district planning authority as to how it should determine any application in which there are proposals to the county which appear substantially and adversely to affect its interest as a local planning authority. It does that in rather a bald way, but apparently it is not intended to eliminate the counties altogether from matters of development control.
The Bill, therefore, as the House will know, creates, as it were, a skeleton for a new relationship on such matters between county and district. That is to be given blood by means of regulations, and the Government have promised to inflate the whole body with what they call a national code of guidance. If that is not sufficient to create life, the Government have also promised that the code may be supplemented, where necessary,

by guidelines covering particular local situations.
One can hardly call that a plan for radical clarification of our planning law. As I understand it, there are now to be two main categories of applications involving the counties. The first category consists of the applications raising county matters, as now restrictively defined, and there is the category concerning applications in which consultation must occur. But the circumstances in which this consultation will take place are by no means clear.
The functions, therefore, between the county and the district councils remain very blurred. The Government say that the consultation will relate to all strategic applications. Again, the meaning of that will be indicated in the national code of guidelines supplemented by local guidelines. With respect, I do not think that that is a satisfactory way of trying to deal with planning law at present. It is, of course, very much concerned—although it seeks in some ways to curtail the powers of control of the Secretary of State—with the alteration of the structure plan and the adaptation and alteration of local plans where the structure plan is not settled, making it easier to adopt and modify a local plan and dealing with conflicts between the structure and local plans.
The object of this part of the Bill, as with so much else of it, is quite admirable. We all know that here, as elsewhere, some reforms are required. But I believe that it is necessary to have some certainty in the law. Otherwise I foresee endless discussions between county councils and district councils, particularly while they wait for the guidelines. But even when they have the guidelines, they will not probably have the force of law in all respects and so they will give rise to continued controversy.
It is right to allow for the repeal and replacement of structure plans. That is a relatively sensible suggestion. The second change is in the procedure for altering structure plans in circumstances in which an examination in public need not be held of proposals for altering or replacing a structure plan.
There are a number of matters where the division of responsibility between the county council and the district council is


not clear. In addition, the circumstances in which the public have the right of objection are no longer clear.
This is not a little battle between the county councils and the district councils over the allocation of functions. It is important to have regard to the effect that these changes will have on public participation.
A matter to which my hon. Friend the Member for Devizes directed attention and on which the Secretary of State hitherto placed great emphasis is the provision in the Bill that enables local plans to be adopted or altered where the structure plan is not yet settled. It is still assumed that there is a structure plan and that it may be settled.
Where the local planning authority has prepared a local plan and the Secretary of State has not approved the structure plan as it relates to the area of the local plan, the authority may adopt the local plan if the Secretary of State so directs. The district planning authority will not need a certificate of conformity. Before adopting the plan, an authority may make such modifications to it as may be necessary to make it conform generally to the structure plan as it stands for the time being.
The division of responsibility between the district council and the county council and the circumstances in which the Secretary of State will make his directions are by no means clear.
There are two other changes that concern development that the Bill proposes. The first enables the authority to adopt a local plan which incorporates more modification than has previously been possible. A local planning authority has always been able to adopt the local plan as originally prepared. Hitherto it could adopt a modified plan only if it had been modified to take account of any objections duly made during the period afforded for such objections. A plan modified for any other purpose could not be adopted. The reason for that restriction is clear.
If modifications to a local plan were freely allowed after the statutory processes of objection and consultation had been completed and immediately before its adoption, the interests of private individuals might be materially affected without notice being given to them. I

refer to the right to object and the opportunity to be heard. The public could find that they had been consulted on a plan that bore no resemblance to what was eventually adopted.
If the principle of natural justice and the policy of encouraging public participation are to be applied in the preparation of development plans, some restrictions have to be made. We accept that in terms of the power to adopt a local plan differing from the plan originally proposed. However, the Bill proposes that the local planning authority may adopt a local plan and modify it to take account not merely of objections duly made but of any other objections made to the plan and
any other considerations which appear to the authority to be material.
It is difficult to reconcile a change of that sort with the Secretary of State's claim that he does not want to reduce the opportunity that people have to stand up for their rights. He wants them to have those opportunities within a structure system. It seems that the provisions in the Bill leave the gaps between respective responsibilities to which my hon. Friend has referred.
It is wrong to be dealing with such matters at this time of night and I do not want to address the House at length. However, there are aspects of this part of the Bill that should be considered at some length and with care. The various authorities and the public should understand exactly what the Government are doing.
11.30 pm
I defy anyone to pick up a Bill of this size and complexity and readily comprehend what it is that is proposed and to understand what exactly will be in the directives and how the respective responsibilities, especially of the county and district councils, are to be dealt with. I hope that, if my right hon. Friend cannot accept the amendment in the name of my hon. Friend the Member for Devizes he will give an undertaking that we shall have a further opportunity next week to consider the planning aspects of the Bill and that we shall not drive sturdily on through the night to little purpose and to the detriment of those who would like to be governed by laws that are clear and understandable, not shoddy and bad.

Mr. Tony Durant: I rise humbly to speak in this debate. I do not wish to follow my right hon and learned Friend the Member for Hexham (Mr. Rippon) in his technical address on the question of planning. I wish to speak to the amendment of my hon. Friend the Member for Devizes (Mr. Morrison) and to say that I am concerned that what is behind it will damage the Bill. It will tend to make the structure plan much more rigid.
I take a rather cynical view of structure plans. Most of them are out of date before we have even got them. We have taken a long time as a country to get them in the first place. Basically they are guidelines on planning and should not, therefore, have a rigid structure.
Recently, at Question Time, the Under-Secretary said that the structure plans were guidelines and that he was much more interested in local plans. I am nervous that this amendment will work against that principle. I am uneasy about what my right hon. Friend is proposing. It would be a mistake to let the county council, in every case, have the opportunity to call in plans, because what we are trying to do in this Bill is to streamline planning. This has been the argument that has long gone on, that there are too many levels of planning and too many people involved. I am nervous that this amendment will put things back almost to where we are now. It will not help the new policy, which is to streamline planning. I speak on behalf of the district councils. They feel that this proposition will work against them and against the attempt to make planning quicker, smoother and more in line with local needs.

Mr. John Peyton: I shall be brief. I wish to support the plea made by my right hon. and learned Friend the Member for Hexham (Mr. Rippon). I hope that the House will not be called on at this hour to consider such legislation as we have before us. I admire very much the speed with which the Under-Secretary ran over his introduction to the amendment which he moved. Had he gone a little more slowly, the meaning of what he said might have been a bit clearer, and that would have been more painful to him and more exquisitely horrible to the rest of us.
I have long been a supporter of lost causes. One such cause to which I have devoted a little of my time has been concerned with purity and clarity in our legislation. The more often I have reiterated that plea, the more complicated, diffuse and ghastly our legislation has become. I am sorry to say that the Bill seems to be eminently deserving of some comment in this direction.
I applaud the intention of Ministers to streamline legislation, simplify local government, curtail Government expenditure and the rest, but one feels that time and again Ministers are so overwhelmed with their good intentions that they do not look closely enough at the instruments with which they seek to carry out those good intentions. My hon. Friend the Member for Reading, North (Mr. Durant) mentioned streamlining. There is not much streamlining here. I wonder what kind of tax will be put upon the digestive capacities of our local authorities to understand this stuff, and how long it will be before they or the Government are clear about what is being done here.
I said when I rose—I meant it—that I did not intend to take up the time of the House for long, but I must say that I find it very difficult to condone, and certainly impossible to applaud, the practice of Ministers in successive Governments of bringing along their slop pails and emptying them all over the statute book.

Mr. Eldon Griffiths: Some years ago I was, while working with my right hon. Friends, addressing members of the Devon county council when I was called to the telephone. The then Prime Minister was at the other end of the line. He said in very clear terms that he was not happy about planning and that I should return to the Department of the Environment and join my right hon. Friend the Member for Yeovil (Mr. Peyton) and assist him in speeding it up. With the assistance of Mr. Dobry, my right hon. Friend and I tried to speed up planning. However, I regret that, as my right hon. Friend the Member for Yeovil said, we were not entirely successful, and the speed of planning in our country remains a national scandal. On average, about nine or 10 years elapse between the decision to build a road and the laying


of the concrete. Two-thirds of that time is consumed by the processes of planning. Therefore, I welcome my right hon. Friend's intention in the Bill to seek to streamline the system. The question is whether the Government have succeeded.
As the hour is late, I shall make only three points. First, we tried once before to arrive at a proper balance between the county authorities as the main strategic planners and controllers of what was happening and the district councillors, who were very much closer to the details. We did not succeed. We assumed that the concurrent powers that existed between the two would work perfectly well because planners were all boys together and that they would understand one another and would not become rivals. In fact, the history of local government since, as before, the 1973 Act is disfigured by endless squabbles between the county and the district planners as to who does what and who should make the final decisions.
Having examined this clause, which I have done with considerable care, and read the reports of the debates in the Standing Committee, I am bound to express my view that, although there is some improvement here, the best that can be said is that it is A for effort but only C-minus for achievement.
The second point arises specifically from the amendment, namely, the structure plan. I hope that in replying the Minister will deal with one specific point which was made by my right hon. and learned Friend the Member for Hexham (Mr. Rippon) with considerable force. The agreement of a structure plan, whether it is a detailed plan, which it should not be, or whether it is a broad-brush plan, which I think it should be and where it does have some value, is the end process of an infinitely long process of consultation and inquiry. Where that happens, the individual has some reasonable visibility of how it might affect him.
My right hon. and learned Friend the Member for Hexham asked a specific question: is it to be the case that a structure plan can be amended without the citizen being able himself to go to the public hearing and to have the authority that is amending the structure plan make its case? If this is not to be so, it is, as my right hon. and

learned Friend fairly said, contrary to natural justice, and I do not believe that the House ought to act in that way.
Finally, I reinforce the plea that if the Government must, as Governments will, have their way tonight and the clause is carried, my right hon. Friend will give the House an undertaking—because there are genuine misgivings on the Conservative Benches—that next week in some way we shall come back to the specific point about the structure plan and the balance between the county and district authorities.

Mr. King: The amendment arises out of the attempt by the Government in clause 70 to meet the problem of overlapping functions between the county council and the district council. I am grateful for what my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) said about the attempt to simplify the streamlining and planning aspects.
With the greatest respect to my hon. and learned Friend the Member for Hexham (Mr. Rippon), I think he will concede that the present position is extremely confused. There is the question of who has jurisdiction. A citizen can put in a planning application. It can lie on the table of the district council for eight weeks. Nothing happens, and he does not know whether it has been decided by the district council, whether an argument is going on between the district council and the county council on whether it is a county matter, or whether the county is intending to direct refusal. The present position, therefore, is very unsatisfactory.
Sadly, in some areas there are intolerable relations between counties and districts. There have been endless squabbles. I recall that in one instance, in a certain northern area, 9,000 planning applications came to the district council and were scrutinised in detail. Exactly the same 9,000 applications came to the county council and were again scrutinised in detail. That cannot be an efficient and appropriate way in which to run our planning system.
Our proposal, therefore, is to try to clarify the respective roles of the two tiers of authority in planning. The proposal that is enshrined in clause 70 is that the county should have responsibility for the structure plan and that the prime responsibility for development control


should lie with the district council in order in that way to avoid pointless duplication.
I am very grateful to my hon. Friend the Member for Devizes (Mr. Morrison), who moved the amendment, for making it clear that he was not challenging the basic objective of the clause. He asked a very pointed question—whether the Government still support structure plans. I recognise the criticisms that can be made of them—that some are far too detailed, taking far too long to prepare, and some are not as relevant as they should be by the time that they are ready—but they are the plans on which the planning system is established. We intend, therefore, to support them.
While we make clear our determination to support the structure plans, there is an understandable concern among the county councils that it will be impossible for them to protect this responsibility if development control is in the hands of districts, which in some cases may be less than totally conscientious in this respect. I think it would be helpful if I were to spell out the safeguards—some existing and some that we propose to add—to establish the position of county councils.
In the case of every proposal for its own development, the district must consult the county. Every planning authority, in deciding planning applications under section 29 of the Town and Country Planning Act 1971, is required to have regard to the provisions of the relevant development plan, including the structure plan.
11.45 pm
Every application for planning permission that is a departure from the development plan and that the planning authority is minded to approve must be advertised. Important applications must be referred to my Department so that we may consider whether to call them in for our own decision. In future we shall require the district, in doing so, to include the county's views on the application.
The clause provides a procedure for consultation with the county in such classes of case as a development order may specify. The district council must take the county's views into account before it may decide the application. The relevant development order will be made

to come into operation with the reallocation of functions made by clause 70. It is our intention that the district shall consult the county on the strategic implications of every application which is of material significance to the structure plan. To guide districts and counties in the exercise of that new duty a code of practice is being prepared.
My right and learned Friend the Member for Hexham referred to the work being done on the code of practice. That work is not dictated by my Department but is a joint collaboration between the counties and the districts to evolve an effective code of practice to cover planning arrangements under the new system. Although final details for publication are not yet settled, they are virtually settled, and I hope that shortly I shall be able to confirm agreement on this important code of practice. It should play a major part to help to overcome the squabbling to which my hon. Friend the Member for Devizes referred.
I believe that structure plans and the strategic role of the county can be adequately safeguarded. We shall not leave the matter there. My right hon. Friend the Secretary of State and I, through the regional offices, will monitor the position closely. If problems arise despite those safeguards, we shall not hesitate to take appropriate action. Under article 10 of the general development order we have the power to prevent a local planning authority from granting planning permission unless and until we are satisfied that it is appropriate for the authority to do so. We have the power to call in any planning application for our own decision. In cases where a perverse decision has been taken, we have both the appellate role and the power to direct revocation or modification of the permission. My hon. Friend the Member for Devizes referred to that. I have made some play of it before, at the expense of a number of other existing safeguards. It is a powerful safeguard.

Mr. Rippon: Will my right hon. Friend explain what he means by "a perverse decision"? How and where will that be defined?

Mr. King: A clear breach of the agreed code of practice, a palpable departure from a structure plan that has not been observed, or a major strategic decision


taken is a matter on which an argument could be made that a perverse decision had been taken. My right hon. and learned Friend the Member for Hexham makes a fair point. He will know how many uncertainties exist within the present system about what is a county matter, and in what matters a county may intervene. This ultimate power—and it is a draconian power—will remain in reserve. If my right hon. Friend were to direct revocation, it could be an expensive item in terms of compensation. That compensation obligation falls upon the district council concerned.
An important point is that in cases of continuing difficulty there is an existing power, similar to the power suggested in the amendment, to make other things county matters. Where it is clear that the proposed system is not working satisfactorily there is a power in the Local Government Act 1972 to prescribe special classes of county matter for particular districts. My hon. Friend's amendment provides a power to direct that certain matters should be made county matters, either generally or for a certain district. There is an improvement, in the sense that this can happen only after a resolution has been laid before the House which would change the planning powers in a particular district.

Mr. Michael Latham: My right hon. Friend will be aware that some of us have misgivings because he uses expressions such as "revocation", which is an exceptional and unusual weapon. Does he intend to publish the code of practice in draft form before another place discusses the matter? It would greatly assist some of us in coming to a decision on this matter if the code of practice were available before the parliamentary procedure was completed.

Mr. King: I hope that that will be possible. My hon. Friend said "in draft form". I hope that it will be an agreed code of practice between the counties and the districts. Therefore, it will not be something, as it were, for amendment, but something on which they have agreed.
I agree with my hon. Friend's comment about revocation. I have perhaps over-emphasised this previously. If so, I apologise. But I was anxious to spell

out clearly all the safeguards, because they represent collectively a significantly greater safeguard for the counties than many of them seem to appreciate.
I have sought to make clear why we believe the position of the counties and their strategic role in relation to the structure plan is safeguarded. I have dealt with this matter at some length, because I know that there is considerable concern among the counties about this responsibility. I hope that the House will agree that on balance this is a sensible way to resolve what in many cases was an unjustifiable duplication in the previous situation.
I hope that, because a major part of the amendment is already adequately covered in legislation, my hon. Friend will not feel it necessary to pursue the matter.

Mr. Charles Morrison: I am grateful to my right hon. Friend for the care with which he has replied to this brief debate. However, I share the feelings of my right hon. and learned Friend the Member for Hexham (Mr. Rippon) and of my right hon. Friend the Member for Yeovil (Mr. Peyton) about the time of night at which we are discussing this important matter. It is regrettable that a matter of such importance should come up for debate at so late an hour.
My right hon. Friend has dealt at considerable length with the safeguards which he believes exist for the maintenance of the structure plan. We can all have our different views about what may be involved in a structure plan, but my right hon. Friend has removed many of the fears that some of us may have had regarding the safeguards. However, I must make the point that time and again in debates on the Bill my right hon. Friend has been able to speak with great certainty about the interpretation which he puts on these provisions. Unfortunately, the outside world does not share his conviction about their meaning. I am not suggesting that my right hon. Friend is necessarily wrong and that the outside world is right. However, it means that he has to do a considerable propaganda job to persuade the local authorities and others about the safeguards and the meaning of the Bill in regard to the planning provisions and other matters.
There will be a further opportunity for these matters to be discussed in another place, and I am encouraged in that regard by what my right hon. Friend said about the code of practice. It will help immensely continuation of discussion on this matter if the code of practice is available. It may help to bring into focus what is being discussed and proposed.
On the basis that there will be further opportunity in another place for discussion of the matter, and consequently further opportunity, if necessary, for amendment of the Bill if the uncertainties felt by people who are involved continue to exist, and then another opportunity for discussion in this House, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 156, in page 56, line 9, at end add—
'(5A) Subject to subsection (5C) below, the provisions to which this subsection applies shall come into operation on the commencement date.
(5B) The provisions to which subsection (5A) above applies are—

(a) the general transfer provisions;
(b) the Greater London provisions; and
(c) paragraph 4 of Schedule 11 below.

(5C) A development order required to be made for the purposes of any of the provisions to which subsection (5A) above applies may be made before the commencement date.
(5D) In this section—
"the commencement date" means the date on which there expires the period of two months beginning with the day on which this Act is passed;
"the general transfer provisions" means—

(a) subsections (1) to (3) above; and
(b) paragraphs 11, 12, 14, 15 and 16 of Schedule 11 below;
"the Greater London provisions" means—
(a) subsection (5) above; and
(b) paragraph 19 of Schedule 11 below; and
"transferred matter" means a matter which before the commencement date is a county matter, as defined in paragraph 32 of Schedule 16 to the Local Government Act 1972, but which ceases to be a county matter in consequence of the provisions of this Part of this Act.'.—

Clause 71

FEES FOR PLANNING APPLICATIONS, ETC.

Mr. Stephen Ross: I beg to move, amendment No. 158, in page 56, line 11, leave out Clause 71.

Mr. Deputy Speaker: With this we may take the following amendments:

Government amendments Nos. 159 to 164.

Amendment No. 289, in page 56, leave out lines 33 and 34.

Government amendment No. 165.

Mr. Ross: Many hon. Members have already said that this is a bad time, late at night, to debate an innovation in planning law that will introduce planning charges for all forms of applications to local authorities for planning permission.
I realise that this results from a request by local authorities, and presumably that is the reason why there are many hon. Members present, but I do not think that that should be a reason why hon. Members who feel strongly that this is a retrograde step should not make their feelings known.
In clause 71 we are assured that the regulations will be brought before the House and will have to be approved by a resolution of both Houses of Parliament. A Government amendment uses the word "each" House. I am not sure whether that means that there is a different variation, but I take it that that still holds good and that the regulations will ultimately be laid and the House will be allowed to vote on them. That did not happen with the building regulations that came into force in most parts of the country on 1 April—I accept that there were charges in the London area and elsewhere—which added substantially to the cost of new properties. They added about £200 to the price of a house costing £25,000. Here, another charge is being imposed that will add even more to the costs. At a time when we are trying to reduce the cost of housing, and at a time when the cost of housing is so frightening to the younger generation and to those of low incomes, extra charges are being imposed.
I am not satisefied that the introduction of these fees will work satisfactorily.


Their introduction is mistaken and misdirected, and I oppose the whole concept, as I did in Committee. It is an infringement of civil liberty. It is a charge for a restriction that has been introduced for the benefit of the people as a whole. It will establish a bureaucracy that will have to be set up to collect the fees. There will be delays, because people will not be able to pay the charges on the spot. They will not appreciate what has happened to them.
The same argument can be used against the introduction of these fees as was used against the proposed introduction of school transport charges and which convinced the other place to throw them out. A whole new group of snoopers will be introduced. There will be informers telling on their neighbours who have gone ahead and done extensions without getting planning permission. That is what people will be encouraged to do when they find out the sort of fees with which they are faced.
12 midnight
Since the Committee stage, we have had published, on 17 June, some idea of what the charges are likely to be. There will be a charge of £30 for a house extension, and £40 per house or flat for a new residential development. For a quite minor shop with a flat over it, the figure will be £80. Mineral extraction could cost up to as much as £20,000. That would be the top figure. For a small builder who might buy five acres of land and wish to develop it, his outline application will cost him about £1,000.
Those are substantial figures. Frankly, some of the business is very simple. If the land is already scheduled for residential development, I cannot really see why a charge of that kind should be imposed. Nevertheless, I accept that we shall be given a second chance to debate the charges themselves. What I am now opposing is the very intention to introduce these charges.
The proposal to charge for planning applications is contrary to the fundamental principle that the applicant has a right to carry out development unless there is a good planning reason to the contrary. Imposition of a charge will encourage property-owners to proceed without consent, resulting in an extension of enforcement activity.
I know the pressure that has been put on my local authority recently to employ more enforcement officers. The general

public expect this to be carried out, and I think that authorities will have to meet that demand.
The House-Builders Federation has consistently opposed the principle of charging, on the ground that
the planning system is not a service to the individual applicant but operates entirely for the benefit of the public at large.
It seems that the Government are intent on introducing these charges. It is the federation's concern that
there should be commensurate proposals in the Bill for improving the efficiency of the system.
That is a fair comment.
The House-Builders Federation is convinced that this improvement can only be achieved if local authorities are required to meet performance criteria and are made responsible for the full costs of unnecessary delay which they impose on developers.
I am sure that the hon. Member for Bury St. Edmunds (Mr. Griffiths) would agree with those sentiments, because if authorities are grossly inefficient and keep everybody waiting just as long as they are waiting now, surely the people who are at the end of the line should start asking for some repayment for the time taken to deliver. The federation says:
This will, at the very least, involve provision being made in the Bill for cost sanctions against those authorities whose performance is consistently frivolous and vexatious and preferably should be allied to a far stricter system of timetabling of applications than exists at present.
My greatest objection is to the intention to charge for planning appeals. We raised this matter in Committee and I understood that it was under further consideration. I think that the Minister took on board the point that we clearly made, that someone who may be refused a planning permission purely because of very strong lobbying by neighbours against one particular councillor who may be able to sway a committee to make a decision which is unfair, undemocratic and obviously palpable nonsense to someone who looks at the matter with a totally independent outlook will find himself not only having to pay for that—£40 or whatever it may be; it may be more—but having to pay on an appeal.
I accept that the Government have tabled an amendment on this matter. It appears that the Under-Secretary does


not know about it, but it is on the Amendment Paper. I gather that Government amendment No. 159 cuts that out; there is no longer a fee for appeal to the Secretary of State. But Government amendment No. 162 says that the Secretary of State may by regulation prescribe the fee for appeal to him or may by regulation also provide for remission or refunding in prescribed circumstances.
We should like to know more about that. When the regulations are drafted, is it intended that this will be set out in them? Government amendment No. 160 takes out the chances of any remission or refunding in regard to planning applications, which seems to make the situation worse.
The House-Builders Federation was very vocal in its support for the present Government when they were in opposition. I cannot think of the number of times that the chairman of Wimpey was in my office, as no doubt he was in other offices. Mr Ron King, presumably no relation to the Minister, urged Members of Parliament to support the amendment and to throw out the charges.
I sincerely believe that it is wrong to introduce such charges—which the public are unaware of—after midnight. The Bill is important. and I hope that other hon. Members will support me. If they do not, I warn them that if the legislation is enacted their mailbags will be full of complaints. People have long understood that they have a right to put in planning applications, but they will now find that they have to write cheques for £40 or more. That may not sound very much to some hon. Members, but it seems a great deal to me.
I should have thought that a payment of £5 would have ensured that an application was not frivolous. The inspector has the right to award costs against the applicant if he considers the application to be frivolous. That is not a bad system. it should be used more frequently. I accept that local authorities should be able to get money from planning permission. Local authorities become frustrated when they find that, despite planning permission, people have not carried out the intended development.
Local authorities could impose a site tax. Such a suggestion never goes down

well with Governments. It did not go down well with the Labour Government. However, it is a most sensible proposition, and would produce positive planning. If a tax is imposed on an increasing scale, people will develop the land, or sell it. I should have thought that the Secretary of State would accept that. I am sorry that the Government have not considered it. It would provide a better means of raising money from those who hold up the system.
I commend the amendment to the House. However, in the meantime, I utterly oppose the introduction of planning charges.

Mr. Graham: We have been given an opportunity to listen to the Minister rehearse the arguments that he addressed in Committee. He may take the opportunity to reflect that Opposition Members oppose the charging principle. Since Committee, a consultative document has been brought forward. Despite the remarks that the Under-Secretary made in Committee about the future of charges for planning appeals, the consultative paper makes no bones about the fact that the Government intend to allow local authorities to charge for permissions, consents, approvals, determinations or certificates under the Town and County Planning Act 1971. Under the same Act. the Government also intend to allow local authorities to charge for planning appeals, other appeals and advertisements.
The Minister has not got a bad record. In the light of reasoned argument from the Opposition in Committee, he often proposed variations. I am sorry that the consultative paper does not diverge from the Minister's comments in Committee. In Committee, the Minister and the Under-Secretary said that the only purpose of the charges was to reduce central Government expenditure. They said that, no matter what flowed from the charges, the central purpose was to reduce Government expenditure. Indeed, the Under-Secretary had the audacity to state:
We believe that we shall reduce the work load."—[Official Report, Standing Committee D, 17 April 1980; c. 2199.]
I should like to know how such charges will reduce the work load on planning departments.
It was interesting that the hon. Member for Isle of Wight (Mr. Ross), in looking at the annex in the consultative document, was able to draw attention to the fact that, for example, for residential outline planning permission £40 would be charged. I have done a quick sum. The total that the Government have said they wish to recoup is £30 million. The total here is £29·5 million. The total which it is expected local authorities' planning departments will get for individual applications—residential, outline, detailed and extension—is £16·2 million. The Government intend that more than half the money that is expected to be raised from this will come from the ordinary individual for an ordinary house or extension. If the Government were serious about differentiating between the small and the big, and between the individual who is building his own house and the big developer building a large development, they would take the opportunity to make charging less punitive on the individual.

Mr. Eldon Griffiths: Am I correct in thinking that under the general development order there will be an extension of the additions that can be put on to an existing house or structure, and that that will not fall under the new charging?

Mr. Graham: It is the Government's intention to amend the general development order so as to allow a 50 per cent. increase in the present permitted development. At present it is 10 per cent. The increase will mean that it will be 15 per cent. When that matter comes before the House, there will be a vigorous debate. If it then becomes permitted development, no application will be required. That will cause a whole series of problems, because the argument then will be that because a larger extension will be permitted without permission it will diminish the amount of work that is required in the planning department to process the applications. I can assure the hon. Member and the Minister that the number of neighbours who will call for advice from the planning department on whether the application is within or without will increase and the amount of time that is taken—let alone the amount of money—in order to satisfy the individual will be very great.
The main Opposition argument here is a distaste for the basic philosophy behind

the charges and also for the fact that this could be the thin edge of the wedge. Not for the first time, in looking at an important part of this Bill, we find that the Government are virtually friendless. I know that the Minister is likely to say that certain local authorities, and perhaps even associations, have said that they want charges. But the CBI, the Town Planning Institute, and the Royal Institution of Chartered Surveyors are opposed to the charge in principle. Also, the House-Builders Federation is opposed to it. At a time when the costs of building are high, the construction industry is in a state of crisis, there is an increase in interest charges and taxation and more difficulty in getting loans, there is to be the added impost of a charge on planning applications.
The Minister will probably say, as he did in Committee, that in the end the individual who gets the benefit will have to pay. That is nonsense. In my authority of Enfield the planning department has cut its staff to the bone year after year. It is not possible to carry out the work without additional staff. The Secretary of State does not waste a moment in urging Enfield and other councils to reduce their staff, yet to carry through the principle will require more staff. Local authorities will bitterly resent the measure.
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The consultation paper mentions a discretion that will be given to local authorities to waive fees in certain cases, but states that none of the enumerated classes will be exempted. I do not for one moment commend the principle of charging, but where is the local authority's freedom and discretion to raise its portion of the £30 million? Why not allow a local authority to waive charges for residential applications or extensions? So much for discretion.
Once the principle of charging is established, people will be careful before submitting applications. Enfield has a courteous staff in its planning department. A great deal of time will be taken up in discussions with developers and individuals anxious to make certain that when their application is submitted it will not be rejected. We have always held that the planning system should be designed to benefit the local community and should be financed accordingly. These changes


will lead to a disincentive to development control. They overturn principles that have been upheld for over 50 years. Planning is for the community, and the community should pay for it.
I referred to the Minister's remarks about appeals. In Committee he stated that there would have to be considerable justification before the Government introduced a charging system for planning appeals. A lead has been given by the Prime Minister this week in reneging on earlier commitments. The Minister has followed suit by introducing the consultation document only this week.
I endorse the remarks for the hon. Member for Isle of Wight with regard to charges for planning appeals. Will justice now be rationed according to the purse? Whoever has the cash, staff and patience will win. Whoever has a good case but no cash is likely to lose. Is that the Government's idea of planning, moral or British justice? Are planning appeal costs designed to pay for inspectors and civil servants, deter appeals or deter an individual from even starting the process? Why have the Government decided to single out this area for charges? Why not change for other community services, such as the Factory Inspectorate or the Alkali Inspectorate, or individual use of the police or ambulances in emergencies? I have never had faith in the Government's good sense to leave the community need alone. None will escape the rapacious eye of the Secretary of State if there is a possibility of yielding money to help to reduce central Government expenditure.
The Government are facing great opposition to their plans and opportunities will be presented when the Bill is considered in another place and when its reflections come back here. The views of local authorities are due to be returned on 22 August, and we hope that before those views are made known the Government will have the good sense to reflect again on the appalling principle of charging for planning permission and appeals.

Mr. Durant: I assume that if a planning application is turned down on technical grounds—perhaps because it is a highway matter—and there has to be a fresh application, the applicant will have to pay again. That would be an invitation

to a local authority to turn down as many planning applications as possible in order to raise as much revenue as possible.
I do not feel that that is the Government's intention. The Government are trying to speed up planning matters. but if the situation that I have outlined could occur it will be an incentive to local authorities to go slow on planning.

Mr. Bob Cryer: Even with the lengthy and confused amendments that the Government have tabled to their confused Bill, power is to be given to the Secretary of State to levy charges for planning applications.
It is worth estimating what sort of costs are involved and looking at the experience of the Department of the Environment which has already ventured into this territory. The House ought to be told that the Secretary of State has already tabled regulations to allow local authorities to make charges in connection with building regulations.
The Secretary of State has sent out a consultative document that includes estimates of the charges involved in the Bill. For the average new house, applications for outline permission and later for the individual dwelling will involve an additional charge of about £80. The Government claim that the fact that house prices are levelling off is an indication of progress in the fight against inflation, but by this Bill, as by other legislation such as the increase in VAT, the Government are making sure that house prices will start rising again.
In addition to the charges under the Bill, which are bad enough, the Department of the Environment has produced the Building (Prescribed Fees) Regulations 1980, which provide that an inspection to see whether plans conform to building regulations will cost £58. After the first inspection, the fee will be £116. That is on top of the fees that the Secretary of State is proposing to charge under the Bill. A fee of about £250 will be charged on houses costing between £18,000 and £21,000.
One would be lucky to construct a house in London or the South-East for under £20,000. Under the table of prescribed fees in the building regulations we are talking about £200 per loan—and so the cost increases.
What is the experience of the Department of the Environment in producing regulations? It produced the Building (Prescribed Fees) Regulations 1980, which were examined by the Joint Committee on Statutory Instruments, which drew the attention of both Houses to the instrument on the ground that its drafting appeared to be defective. The twenty-fifth report stated:
The Regulations prescribe the fees that local authorities may charge for performing their functions under the Building Regulations 1976. The fees are payable when plans for a building project are first deposited and after a first inspection of the work is carried out. In oral evidence to the Committee witnesses from the Department of the Environment have admitted that in certain circumstances the intention of the Instrument is not clear. For example where the plan deposited includes more than one building the Table of prescribed fees does not indicate whether a single fee is payable for the whole project or whether each building is subject to a separate fee.
The Department of the Environment submitted the instrument which is acknowledged to be defective by its own officials and refused to revoke it. It is still in force. I understand that the Department plans to table a new instrument. What a botched-up way of legislating for local authorities which are looking for a prescribed opportunity. Local authorities can charge only prescribed fees.
I have no doubt that the regulations in this legislation will involve the Secretary of State laying down prescribed fees. The experience is that the Department of the Environment is careless and slipshod about its administrative power. The Department should not have the extra powers. It cannot carry them out. It is not helping local authorities.
I tabled a question about the number of local authorities which are using the regulations. I was told that not one makes charges. The reason is that the scale of prescribed fees is so vague and ambiguous that the authorities might have to give refunds. That means more work, not less, for local authorities.
We are discussing a building process with applications and charges for outline planning permission, for detailed planning permission, for deposited plans and for first inspections. We are talking of four stages of fees. They have to be levied,

collected and supervised. That means more work, not less, for local authorities.
What about appeals against the Secretary of State when he levies a particular charge? Will the regulations include the right of appeal? If so, will it be to a tribunal or direct to the Minister? Will he be judge and jury? That would be unsatisfactory. There must be another form of appeal if the Secretary of State is to go into this matter with a sense of fairness and justice. I know that that is foreign to the Secretary of State's nature. Let us assume that he yields to his better but shrivelled nature. That means more people, more tribunals and more applications to review, counter-review and so forth. At the end of the day, will it encourage building? Of course it will not.
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There are 200,000 building workers on the dole. Will small builders be encouraged to put up a few houses if they must now cope with four stages of application, charging and approval? I should think that it is more likely to discourage them. What about the prospective home builders? I suppose they belong to the category that the Secretary of State would wish to encourage. We certainly wish to encourage the couple, or the cooperatives, prepared to put up their own house or group of houses in building associations. Will they be encouraged? On the philosophy of the Government, I should have thought that form filling, applications, charges, reviews and counter-reviews would act as a measure of discouragement.
The Secretary of State for Industry says that small businesses should have to fill in fewer forms. That would leave them to get on with the job. If that is true for small firms in industry, is it not also true for small firms in the building industry—an industry which, I understand, has a large number of small firms? Is the Secretary of State intending to encourage those businesses to grow up into the McAlpines, the Taylor Woodrows and the Costains? It seems to me that small firms will be discouraged because of the plethora of charges and applications.
There are now four stages and it is as well to remind the House that the Secretary of State already has two of those stages in operation and that he has made


such a botch of them that they are not even being applied.

Mr. Guy Barnett (Greenwich): My hon. Friend was the Minister with responsibility for small businesses in the Labour Government and the House will have listened with interest to what he has been saying. The scale of charges suggested in the consultative document published by the Government covers commercial, industrial and other buildings and plant and machinery. What sort of encouragement is that to any small business and the employment that we hope for from small businesses? I am sure that that is a matter to which my hon. Friend will wish to address himself.

Mr. Cryer: It seems to me that in this legislation the Government are simply refuting the claims of the Secretary of State for Industry that the Government are trying to get rid of forms. The Labour Government tried to do that because they genuinely did not wish to burden small businesses with needless and useless forms. We got rid of thousands of forms which burdened small businesses.
I do not believe that any Government would seriously wish to burden any business with unnecessary administrative forms and information requirements of one sort or another. This is really an exercise in charging gone mad. It will yield a small amount of revenue and cause a great deal of dissension at local authority level. Those authorities will take the brunt of the dissension that will come about as a result of this proposal and it will destroy a system which has been accessible and effective for many years.
It will certainly do no good for the building industry. It will not encourage individuals who wish to build. It will not encourage firms which wish to build and it will certainly not put any more "brickies", carpenters and joiners back to work where we need them, thus encouraging growth in the building of houses and other facilities. It will be a useless bureaucratic intrusion by a Government who seem to have their values completely upside down. Therefore. I shall vote against this clause.

Mr. Rippon: If one thing is clear, it is that this is a feature of the Bill which will have the most immediate and noticeable impact. As the hon. Mem-

ber for Isle of Wight (Mr. Ross) said, there is likely to be a good deal of correspondence. This is a change in our planning law that I feel strongly should not be considered at this time of night. It should be dealt with separately at an earlier hour.
Clause 71 gives the Secretary of State exceptionally wide powers to carry out a number of acts by regulation. It is important to divide the power to make regulations into two distinct parts. The Secretary of State may make such provision as he thinks fit for the payment of a fee to a local planning authority in respect of an application made to it under planning enactments for any permission, any consent, any approval, any determination or any certificate. Even more controversial is the right that the Secretary of State is given in the Bill to prescribe a fee of any amount that he may suggest in respect of an appeal to him under the planning enactments. There is great force in the argument that a fee, whatever the merits in other cases, should not be charged when someone is making an appeal under the planning Acts.
The introduction of such charges has been justified by the Secretary of State on the intriguing ground that he sees no reason why prospective developers should not pay for the service that their demands create. He claims that such charges will speed up the system. I see no reason why they should do so. The Secretary of State says that that will be the effect because charges will reduce the number of applications. He suggests that local planning authorities will be given to work more quickly. However, once they have their fee there will be no need for them to work so hard.
I understand that a case can be made for these fees as they fall into the first category, but there is no justification for the width of the enabling power, which is restrained only by the need to secure affirmative resolution of both Houses of Parliament. Many of us know how much weight can be attached to that. There is nothing in the Bill that excludes regulations being drawn by the Secretary of State on any basis that he thinks fit to adopt. We have the helpful consultative document, but that is not the last word on what the present Secretary of State may do or what a future Secretary of State may do.
The Bill reveals nothing about the scale of the charges, the revenue that they may provide, or the principles in accordance with which the charges will be made. The Government have merely said that the scheme will be simple, universal and mandatory. They say that the aim is to recover a substantial proportion of the money that it costs to run the development control system. That cost is now estimated to be about £50 million a year.
The Government's aspirations may or may not be realised. No one who considers the Bill is able to say with certainty what the scheme is or what it is likely to be. The one certainty is that there is bound to be increased bureaucracy. One observation can safely be made even before we know the nature of the scheme. The proposal appears to give rise to the curious anomaly that a person may be subjected to no charge if he carries out development in breach of planning control and receives an enforcement notice. That is because he will have made neither a planning application nor an appeal.
It may be said that one incentive that the provision offers is not to apply for planning permission, a section 53 determination, an established use certificate or anything else. There will now be a financial motive on the other side to wait for the local planning authority's decision whether to serve an enforcement notice. That might require more detective work in development control, which will increase costs, and any such costs could be recovered only by charges against those who made application or appeal. It seems that the Minister might give some help on this point. Otherwise it seems that those who comply with the requirements of planning law will be made to pay for those who do not.

Mr. Michael Shersby: Is my right hon. and learned Friend saying that a developer will proceed with a development or an individual with the construction of a single dwelling or the modification of a flat to avoid the payment of a fee? Surely, if he were to do that, he would be likely to run into considerable difficulties, which would far outweigh the modest fees proposed in this scheme, which has been widely canvassed.

Mr. Rippon: It depends on the nature of the fee and the nature of the development. If someone is dealing with a substantial application, that will not apply. Not long ago a developer withdrew altogether from the planning process because his costs, before the inquiry had been concluded, had already exceeded £1 million. No doubt a modest charge for application would not deter him. But we are dealing with large numbers of small applications, and people are reluctant to pay out £40 if they think they can avoid doing so. Some of us who are lawyers may be able to help them in that regard.

Mr. Guy Barnett: One irritant which affects local planning committees and employees of local authorities is the repeated application for planning permission for the same development on a particular piece of land. Every hon. Member and every councillor is aware of that problem. I suspect that one of the motives behind this clause has to do with the fact that a developer repeatedly applies for planning permission for a development because, under present law, he is permitted to do so. As a consequence, he wastes the time of planning officials and committees on every occasion he makes application.
It seems to me—this was echoed in other parts of the House, and particularly by the right hon. and learned Member for Hexham (Mr.Rippon)—that the proposal that we are considering is in flat contradiction to the principle lying behind our planning law. The assumption behind the law is that individuals, companies or groups of people have a right to do what they wish with their land. That right has to be limited to protect the interests of the community as a whole. There has been misunderstanding about that. That is the basic principle upon which the Town and Country Planning Act 1947 was founded.
It seems odd that a Conservative Government, who believe in the principle that I have enunciated, should come forward with the proposal to charge individuals or companies or groups of people for obtaining what I should have thought they would regard as their absolute right, to be limited only by the perfectly proper demands of the community as a whole. Because the community has an interest,


because it is properly interested in the consequence of development on the community, it seems right that the community should pay, as it always has, for the price of development control. There seems to be a basic logical fallacy in the introduction of charges which are made upon those who make application for development.
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The right hon. and learned Gentleman made a very valuable point when he suggested that these proposals can have one consequence only, namely, that of encouraging the evasion of planning control. Planning departments throughout the country already have to cope with the considerable problem of the evasion of planning control. It is not easy to police. It is a considerable problem to ensure that individuals and companies who want to develop particular pieces of land apply for planning permission.
One of the ways in which planning departments are able to encourage that sort of application is by demonstrating that as planning departments they are willing to discuss planning proposals prior to an application actually being submitted. Sometimes the consequence of those discussions is that the individual discovers that in fact he does not need to obtain planning permission, because his proposal is acceptable within the general development order; or, indeed, he may discover from an official to whom he has spoken in a local authority planning department that if he alters his proposal slightly it is more likely to receive the approval of the planning committee.
All the preliminary discussion that goes on between the person applying for planning permission and a planning department is very valuable, but it seems to me that the proposal that we are discussing will discourage people from even approaching the planning department. It will certainly discourage them from making a planning application, and it may even encourage them to evade planning permission, if the Minister is right in his suggestion—I can only believe from the consultation document that he is right—that enforcement control will not involve any planning charges whatever.
I have before me the annex to the consultative document. On the subject of charges for planning applications, there is

no reference in this annex to any charge for enforcment control. So if this legislation goes through, or if the regulations go through in the form suggested in this document, it will be an open invitation to anybody who wishes to undertake any form of development not to apply for planning permission but to wait for enforcement action to be taken against him.
I underline the very important point made by my hon. Friend the Member for Keighley (Mr. Cryer). This is, after all, a Government who have invented the idea of the enterprise zone, the objective of which is to diminish the quantity of planning control, forms and the rest of it which impede the development of small firms and of industry generally. Yet here again we have a Government who are now demanding £40 per square metre of development from small firms that wish to develop. That is the charge that the Government are proposing for small firms that want to develop their premises in order to expand their production and perhaps even to take on extra labour. I presume that these charges apply to enterprise zones as well as to other parts of the country.

Mr. Clement Freud: Is the hon. Member aware that if the enterprise zone wishes to have a flagpole to show that it is an enterprise zone there is another £30 for the application and another £30 if it is carried on appeal?

Mr. Barnett: The hon. Gentleman is absolutely right; and if it wanted a radio aerial that would add another £30 to the cost.
I cannot for the life of me understand why this Government, who profess to be in favour of enterprise and development and to be on the side of the small builder and the small firm, should come forward with proposals of this sort, which can do nothing but act as a disincentive to development. In addition, they fly in the face of every principle that the Conservative Party is supposed to support, namely, the right of the individual and of groups to do what they wish with their own, limited only by the rights of the community, and certainly not to pay charges in order to obtain the necessary permission to do so.

Mr. Eldon Griffiths: I have no doubt that these charges will come as a pretty nasty shock to a lot of people in the


country, and I am quite sure that it is good advice to my right hon. Friend that he should take pains to explain very carefully to the country why it is necessary—and, as I see it, right—to make charges for the basic planning applications and consents.
What was wrong with the arguments from the Liberal Bench and with the eloquent speech of the spokesman for the official Opposition, the hon. Member for Edmonton (Mr. Graham), was that they were in favour of general economy but of particular expenditure. The planning system that Parliament, for good reasons, has imposed on the nation is expensive, and it is simply a matter of difference, I presume, between the two sides as to who should pay.
The hon. Member for Edmonton and the hon. Member for Isle of Wight (Mr. Ross) seemed to think that it could be free, but nothing is free; everything has to be paid for by somebody. There is some merit in more of the cost being borne by those who stand to benefit than by the general public. That may well be the difference between us. But I see nothing wrong in principle in the notion that we should move towards charges.

Mr. Stephen Ross: I hope that the hon. Gentleman listened to my speech. I put forward some rather more sensible suggestions, I thought, as to how local authorities could raise finance. One of them was site value rating. I believe that it would be a sound way to do it. I agree with what was said about second or third applications for the same piece of land. I cannot, however, understand the argument about private individuals and making a charge of £30 or £40.

Mr. Griffiths: I am not quite sure what was the purpose of that intervention. We could all debate for ever how local authority revenues can be maximised, whether by sales tax, income tax, charges or whatever the method might be. I am simply saying that this is an expensive business, and it is not unreasonable that those who stand to benefit should make some contribution towards it.
I hope that the charges to be made will be held to the absolute minimum and used sparingly. They will not in any way cover the real cost; they will be merely a token contribution at best. I do

not believe that they will cover the true cost that will be involved.
In an intervention I said that it was quite wrong to suggest that small house improvements made by individuals will be caught. Since, in a later stage of the legislation, we shall find that the general development order enables people, in the case of residences, to increase and extend the size of their premises by significantly more than they are allowed to do at the present time—this will apply also to industrial and commercial premises—it follows that all those improvements and extensions will not come within the charges that are to be made.

Mr. Guy Barnett: For the information of the hon. Gentleman and of the House, I point out that the Government's consultative document contains the item:
Householder (house extensions and alterations not adding to the number of dwellings)—£30.

The expected national revenue is £6 million.

Mr. Griffiths: We must leave it to the Minister to advise the House correctly. The general development order will increase by 50 per cent. the amount of the area that can be added to a house, and will allow commercial and industrial premises to be dealt with in a similar way. But none of those things will be caught in the charges. To that extent, to make a case for the small man is sheer humbug, or lack of homework on the part of Opposition Members.
My final point is a plea to my right hon. Friend the Minister. I share the views of my right hon. and learned Friend the Member for Hexham (Mr. Rippon) about appeals, as opposed to planning permissions. Where an individual is affronted by the refusal of his application by a local council and he takes the trouble to brief expensive lawyers and to go to the Secretary of State to make his case, who comes to the conclusion that the council is in error and has wrongly refused him, it is unfair that, in addition to the extra costs incurred by the successful applicant, there should be lumbered on to him the fee for proving that he is right and the local council wrong. That would be to pile an offensive charge on top of the costs that he has already incurred through no fault of his


own, but through a local council, in many cases, being perverse.
As my hon. Friend the Under-Secretary knows, only recently a case in Islington was brought to my attention, although it was not in my constituency, because of my general interest in planning matters. The council had perversely refused a planning application, and the matter went to appeal. The council behaved badly and cost the potential developer large sums of money. Thanks to the diligence of my hon. Friend the Under-Secretary and his Department, that council was found to have been utterly wrong in its approach. The firm in question has already paid many thousands of pounds in additional fees and has lost the use of its capital due to a delay of two or three years on the application. It would go a little far to ask it to pay a fee for something that the council, not the firm, had caused to happen. I ask my right hon. Friend the Minister to think again on that point.

Mr. John Evans: I am grateful for the opportunity to participate briefly in the debate. I fully agree with the right hon. and learned Member for Hexham (Mr. Rippon) that it is appalling that such important matters should be debated at this late hour.

Dr. Keith Hampson: Where has the hon. Gentleman been all evening?

Mr. Evans: Will it be in order, Mr. Deputy Speaker, if I explain the parliamentary duties that I have been performing today, including "whipping" a Committee? I remind the hon. Member for Ripon (Dr. Hampson) that Report stage allows hon. Members who did not have the opportunity to serve on the Committee to speak when clauses of interest to them and their constituents are being debated. Even though I come here at this hour of the morning to debate the issue, I shall be glad to go through my parliamentary day if the hon. Gentleman wishes to press me to do so.
When I came to the House in February 1974, I believed that it was essential that a Member of Parliament should have served a fairly long period—a long apprenticeship—as a member of a local authority. I was staggered to find how few hon. Members had served on local

authorities. I am sure that the House will agree that the Bill is evidence that the Secretary of State has very little idea about local government in Britain. Anyone with any knowledge or understanding of local government work would not have produced such an appalling Bill. I wonder how many Conservative Members will have the courage to reject the monstrous clause 71, which Liberal Members are seeking to delete.
It is significant that we have not only the Liberal amendment, which sensibly seeks to remove this appalling clause, but a considerable number of amendments tabled by the Government which seek to amend their own clause. I suggest that the sensible course would be to remove the clause altogether.

Mr. Latham: Where are the Labour Members?

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Mr. Evans: They are in varous parts of the House, waiting to vote. I do not know precisely where they are. However, it is interesting to note how many Conservative Members are present. I hope that some of them will for once have the courage to go into the Lobby and to reject a clause which is an affront to local government.
I may not be unique in the number of local authorities with which I have to deal in my constituency, but I am sure that very few Members of Parliament have my experience. My constituency spreads across three county councils, two of which, Merseyside and Greater Manchester, are metropolitan county councils and the third, Cheshire, is a shire county council. My constituency also spreads across four district councils—Wigan, St. Helens and Salford—which are metropolitan district councils with a variety of responsibilities in planning, and Warrington which is a district of a shire county. It also has a new town county council and 10 parish councils. They have all written to me at length about various provisions in the Bill and clause 71 in particular.
I suggest that most Members of Parliament who attend to their duties will acknowledge that probably the first item in their postbags which concerns their constituents is housing repairs and that the second is undoubtedly planning applications. Planning applications range


from major items, such as the building of a new housing estate on a green field site or a proposal to extend an existing village—for example, from Warrington new town to Warrington district council—to a proposal by a water authority to build a sewage works in a village, which would presumably fall within the terms of clause 71.
I am sure that most hon. Members accept that the items which most occupy their postbags are the minor planning applications to extend a lounge or a bedroom or to build an extra bedroom over a garage. It is in that context that problems are created for planning departments. I have at least six cases on my hands of neighbours objecting to planning applications. People are already concerned about plans to develop or to build extensions to adjacent properties, the delay in getting planning consent and the additional cost involved. Yet clause 71 proposes that people should not only have that problem but should pay for the privilege of submitting planning applications to the council in the first instance.
I suggest that Conservative Members should bear in mind the wise words of the right hon. and learned Member for Hexham, who has considerable knowledge of these matters and has been an honourable critic of this horrendous Bill throughout all its stages, that the vast majority of people who will be concerned about the implications of clause 71 will be owner-occupiers. I am sick and tired of the number of times that Conservative Members claim that owner-occupiers in the main vote for them. If there is any truth in that argument, I suggest that they should start to pay attention to those whom they claim to represent. Undoubtedly, those people will be affected by the application of clause 71. It is important that the Secretary of State, who has come back into the Chamber, should start telling the House about the amount of charges that could be involved.

Mr. Cryer: In addition to the charges under clause 71, the Secretary of State is determined to replace the Building (Prescribed Fees) Regulations 1980, and to make owner-occupiers pay an additional fee on all work in excess of £1,000. They will have to pay four fees instead of two.

Mr. Evans: I am grateful to my hon. Friend, and I accept his point.
My hon. Friends and I tend to ensure that our constituents are aware of what the Government are doing in this respect. It is not a question of people having to pay for the planning departments. I accept the general principle that one gets nothing for nothing, and that planning departments have to be paid for. This money will not go to the local authorities to build bigger planning departments. It will go to the Treasury. Acording to subsection (5),
Any sum paid to the Secretary of State …shall be paid into the Consolidated fund.
Conservative Members must recognize that while there have been problems and difficulties in the past in relation to planning delays, those delays have not been capricious delays because planning officers throughout the country were sitting on plans. The problem is, and has always been, that there is a shortage of planning officers, which means that planning applications cannot receive the urgent and immediate treatment which applicants feel they are entitled to. There is no provision in the Bill that would put right that difficulty and increase the number of planning officers, which would be beneficial. The Bill and the whole thrust of the Secretary of State's arguments seek to cut down the number of local authority staff and thereby further delay the planning applications.
At this late hour we are discussing whether people should be charged for the privilege of submitting a planning application to the local authority. While there is much in the Bill that is obnoxious and repugnant to most people—I have been dumbfounded by the number of local authority associations, county and district councils and parish councils that have written to me asking me to oppose certain sections of the Bill—clause 71 is undoubtedly one of the worst sections of it. It is apparent from the phraseology of the clause and from the number of amendments that have been tabled by the Secretary of State attempting to make sense of it that the right hon. Gentleman has no knowledge of the planning procedures that affect local government and people. It is a tragedy that he is attempting to place such an appalling Bill on the statute book.
I have a feeling that most, if not all, Conservative Members will not vote against clause 71 because they hope that because of the lateness of the legislative timetable and the pile of Government legislation in the House of Lords the Bill will never reach the statute book. They trust that this Bill, and clause 71 in particular, will disappear into the dustbin, where it belongs.

Mr. David Penhaligon: I never thought that the day would come when a Government proposed that a constituent of mine or of any other hon. Member would have to pay a local council, say, £30 to discover that he is not allowed to erect a flagpole. I can tell the Minister what the good, honest, sensible folk of Cornwall will do. They will put up the post in any case. When the council serves them with an enforcement notice, they will say "The post has been there, we think, since 1834. It is true that it is a bit taller than it was. It has been painted recently, and it has generally been sorted out." The argument will go on for a very long time.
This provision is a major encouragement of people simply to avoid the sense of planning permission. In some of the really rural areas of my constituency, the simple fact is that planning permission in real terms has existed only since the Local Government Reorganisation Act 1974. After that Act, the Restormel council, in my constituency, decided to survey to see how many illegally parked caravans there were within its area. After it passed 200 without planning permission, it decided to stop the exercise. The council will pursue the matter of planning permission in relation to caravans brought into the area from now onwards, as opposed to doing it retrospectively.
The Bill is an encouragement to go back to the old days—days that I would regret—because the system works only if the mass of the people are willing to support it.
The specific point that I wanted to raise is that I see, with considerable horror, that there is a serious possibility of charging up to £20,000 for planning permission for mineral development. It is worth recognising just how planning

permission has affected mineral development over the years. A hundred years ago in Cornwall, if people had permission for access to the land they simply dropped a shaft and took out the minerals, if they were there. Some of the evidence of those days is to be seen in the county. As some of the shafts collapse, people's houses are affected by earth movements, and so on.
Planning permission was implemented, quite rightly, in order to stop people having the right simply to extract minerals from any area whatsoever. The Minister must ask himself who has benefited from that procedure of planning applications for the exploitation of minerals. Is it the company that wants to exploit the minerals? Or is it the people who, at long last, have got a defence against their rights being taken away, against their houses being eroded and against their general environment being destroyed?
The answer must be that it is the people who have benefited. In that case, why charge the company that is making the application?
I do not know what the present Government have got against mineral exploitation, but already, for reasons that I have never understood, they forget that minerals in the South-West are in the South-West when it comes to application for development area status, the argument being that for that process of business the South-West is not a development area. Now we are told that the one industry in my constituency which provides jobs, which helps the balance of payments and which produces just the sort of economic viability that this country wants could have to pay sums of up to £20,000, and not for its own benefit, because it gains not by this planning permission. A hundred years ago there were no difficulties at all. The shaft was simply dropped. Now companies are told that they will have to pay up to £20,000 because of the general objections that will be lodged in that locality.
I see no logic or reason in this charge. That is the basis of the whole argument tonight. I read in one newspaper that £27 million is the sort of figure that it is hoped to raise. This is a general tax on development and initiative. I raise the point about mineral rights because they


seem to have much the largest figure applied to them.

Mr. Cryer: Would there not also be a possibility that, because a mining company has paid about £20,000, a local authority, when considering a planning application, would take the view that since the company had paid such an enormous sum it had better accept the application? Would not the involvement of such a large sum tend to blunt the objectiveness of some local authorities in examining the application?

Mr. Penhaligon: I have no doubt that the possibility of raising revenue will change local government's neutral attitude to most applications. I do not know whether that applies to mineral applications. Traditional mining areas such as mine, are too restrictive about applications to develop minerals. However, that is not the subject of debate.
A process exists to guard people against ludicrous folly. It has developed over the years, and is rightly on the statute book. The Government say that it is not the people who will pay for that process, but the individual or company making the application. I see no logic in that. I shall vote against the measure.

Mr. Freud: rose—

Mr. Fox: If I sense the mood of the House correctly, it expects me to deal as expeditiously as possible with the majority of points that have been raised.
In Committee, Parliament gave full consideration to the Bill. The fact that no guillotine was needed is proof of that. Those hon. Members who have read closely the reports of the Committee proceedings realise that that is a fact.

Mr. Freud: Will not the Minister accept that Parliament had no say in Committee?

Mr. Fox: Of course I accept that. As three days were spent discussing provisions on the Floor of the House on Report, I should have thought that hon. Members had had adequate opportunity to have their say. The Liberal Party has had a fair share of this debate.
My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) described clearly the problem that faces the Gov-

ernment. It should come as no surprise that we intend to reduce public expenditure. If it is possible to charge for local authority services, we shall scrutinise that possibility and, where necessary, bring forward proposals. We have therefore brought forward a sensible measure. A contribution by those who benefit from planning approval must be made to the £50 million paid by the ratepayer and taxpayer. It is a departure, and perhaps it should have been done a long time ago.
There are certain benefits. My hon. Friend the Member for Bury St. Edmunds was right to suggest that we are removing many small applications from the planning field. There is no question of such charges being applied to the applications that some Opposition Members have described. I was amazed that the hon. Member for Greenwich (Mr. Barnett) should criticise the amendment of the general development order. The previous Labour Government tried to do this. Our proposals will be far better considered.

Mr. Guy Barnett: I did not criticise the change of the general development order. I asked why the consultative document, issued by the Government, suggests that the income per annum from household extensions and alterations will be £6 million.

Mr. Fox: I question the figure that the hon. Gentleman has given. I accept that it is in the consultative document. However, other figures show that the amount is in excess of that.
There is a side benefit to the provision. A local authority has the benefit of the income. We are talking in terms of £30 million. The Government's suggestion that this will benefit the planning system will deter certain people. If the charge is kept at a modest level, it will not deter sensible applications. In the past many local authorities have complained about ill-considered applications being put forward which were a source of considerable expenditure for those authorities.
The hon. Member for Edmonton (Mr. Graham) made a number of mistakes in his speech. He said that the consultative document referred to charges for appeals. It does nothing of the sort. We have made it quite clear, and we gave a commitment in Committee, that we would take appeals quite separately, and that


in no circumstances would the permission to charge for applications also apply to appeals.

Mr. Graham: Will the Minister allow me to read from the consultative document:
The Local Government, Planning and Land (No. 2) Bill proposes power for the Secretary of State to prescribe charges for: applications to local planning authorities for any permission, consent, approval, determination or certificate under the Town and Country Planning Act 1971 and its orders and regulations; planning appeals and other appeals under the same Act, orders and regulations.

Mr. Fox: The implication of the hon. Member initially was that the consultative document was concerned with appeals as well. I am simply making the point that the Secretary of State in Committee gave an assurance that we would bring forward an affirmative resolution for appeals quite separately from the one charging for planning applications. No consultation paper has gone out on appeals. I said in Committee that it was our intention to listen very carefully to all the representations made to us and that we understand the difference that many hon. Members make about charging for applications and charging for appeals.
The hon. Member also said that the local authorities would resent charging. So far they have all been in favour, as far as we can tell, and we shall await the results of our consultations to prove it.

Mr. Cryer: If local authorities are so enthusiastic, why do they not charge under the Building (Prescribed Fees) Regulations, which came into operation on 1 April 1980? Apparently not one local authority has made a charge under them.

Mr. Fox: I shall dispose of the hon. Member's point. He made a number of allegations in his earlier contribution. Our information is that a number of local authorities are charging for building regulations. The hon. Member made some nasty insinuations about the Secretary of State. My right hon. Friend made it clear that after six months' operation of the charges we shall review them. That seems a sensible policy.
Of course, half the income will come from individual house owners, but my information is that only a minority of

applications for outline and detailed permission for new houses come from individuals. I assure my hon. Friend the Member for Reading, North (Mr. Durant) that we cover his point in the consultation paper. Where there is a possibility of dual charging, the local authority will have permission to waive any extra fee under the small changes that may be necessary in the application.
On the point raised by my right hon. and learned Friend the Member for Hexham (Mr. Rippon), we think that these charges are too modest to encourage the sort of evasion that he spoke of. I was surprised to hear him suggest that there would be evasion of any magnitude. To meet such a problem, it is not outside the realms of possibility that we shall charge for permissions granted as a result of a successful enforcement appeal. There are all sorts of opportunities open to us. In the past, Parliament has always been able to come up with the answer, right or wrong.
The opposition of the hon. Member for Greenwich to charging was well known in Committee. He will be aware that it is our intention to relax planning applications in enterprise zones.
My hon. Friend the Member for Bury St. Edmunds mentioned the question of appeals. It is a difficult matter, and we had some hesitation in dealing with it. There can be no question of payment in the manner that my hon. Friend described. There is already permission for awarding costs. We are considering carefully whether we can introduce a wider award. If and when we bring forward proposals, my hon. Friend will be able to make a further contribution.

Mr. Eldon Griffiths: Where a local authority has misdirected itself, a charging master is brought in who can allocate costs against that authority. However, that is not my point. How can it be right to charge a fee for the services of the Secretary of State if he finds that the council has been doing wrong and has caused the applicant a great deal of cost and delay? If such a fee is to be charged, surely it should rest with the council that has caused the problem.

Mr. Fox: I accept that. My hon. Friend illustrated the difficulty of such proposals.
I emphasise that we are carrying out our promise to leave appeals as a separate issue. There are a number of Government amendments that carry out the commitments that we gave in Committee, the principle one being that we shall bring before the House separate proposals for appeals.

Mr. Freud: I am sorry that I was not called earlier, as I had a number of questions for the Minister arising directly from what has been said. Perhaps the Minister will respond when I have asked the questions.
The Minister states that there is no question of charges for small applications, and clause 71 clearly states that:
The regulations may provide for the remission or refunding of a prescribed fee.
There is an annex for the scale of charges in which the Government estimate roughly what the income will be under the different headings. Can the Minister explain briefly how he arrives at £6 million for house extension and alterations not adding to the number of dwellings at £30 a throw for 200,000 applications? Bearing in mind the Secretary of State's right not to charge, how many more applications will be made than those that the hon. Gentleman estimates will be charged?
The hon. Gentleman says that these are small charges. In the case of commercial and industrial extensions, I do not believe anyone would object to commercial developers paying a charge. However, for radio aerials and flagpoles he has estimated an income of £600,000 a year, which means 20,000 applications. I believe that the hon. Gentleman will admit that the average cost of a flagpole is less than £30. Does he therefore expect someone to pay £30 for an application for a £10 flagpole?

Mr. A. J. Beith: Does my hon. Friend realise the full enormity of the indignity involved? In many cases the poor fellow will be refused permission to put up a flagpole. Is it not extraordinary to suggest that the State, when imposing such a petty restriction on an individual, should charge him for the privilege of having an application refused?

Mr. Freud: I am grateful to my hon. Friend. I am also grateful for the fact that this flagpole legislation does not appear to apply to Northern Ireland.
The Government believe in home ownership and are encouraging people to buy houses in the public sector. Is it not right that those who buy a council house should be able to add a garage or an annexe without having to pay £40 or more for an application? What percentage of applications that the Minister expects for minor alterations, extension and garages does he anticipate will be charged for?

Mr. Fox: The hon. Member has raised a number of interesting points. Let me deal first with flagpoles, which seem to be the most important question, in the view of the Liberal Party. If the flagpole is part of a dwelling, there will be no question of a charge being made. A charge will be made only when a flagpole is used as a form of advertising.
The figures that were arrived at come from the broad knowledge of my Department of the number of applications submitted each year. The figures in the consultation paper are as accurate as possible.
There are more than 250,000 householder applications each year. We assume that about 200,000 will be removed once our amendment to the GDO goes through. By far the greater number of such applications will be removed from the system.

Mr. Stephen Ross: Of course local authorities will support the introduction of planning charges. They are hard up and will look at anything that will make them a few pence. However, I can think of many better ways in which we could save money on planning. If we considered planning in a more regional context and set up planning staffs to deal with a whole county, instead of each local authority having its own planning department, we could save a great deal of money.
There has been no answer to the point about the increased bureaucracy that will be created. Of course the Government's proposal will result in increased staff. Chief executives will say that they will have to employ one or two more


people to collect the money and police the system.
Charges for appeals should not be proceeded with. We have not had that assurance, but at least the matter is to be covered in separate regulations. The Minister did not deal with the charge that the proposal will add to the cost of new building. It is wrong that at a time when we are trying to cut prices we should add a charge of £200 or £300 per house.
We should divide on the amendment, because the Government are introducing a new principle.

Mr. Freud: Will my hon. Friend consider the Minister's answer that, of 250,000 applications, 200,000 will not be made when the clause is passed but that

the Government will receive £6 million from the outstanding 50,000?

Mr. Fox: In the heat of the moment I made a mathematical error. I meant to say that out of the 250.000 applications about 200,000 would remain.

Mr. Ross: If the Minister thinks that the fees are modest, he is in for a shock. Hon. Members who live in a country area, like the right hon. and learned Member for Hexham (Mr. Rippon) and myself, know that if someone says that planning applications involve fees of £30 or £40 the people will make a gesture with two fingers and do it their own way.

Question put, That the amendment be made:—

The House divided: Ayes 20, Noes 210.

Division No. 395]
AYES
[1.36 pm


Alton, David
Howells, Geraint
Ross, Stephen (Isle of Wight)


Bennett, Andrew (Stockport N)
Leighton, Ronald
Sheerman, Barry


Canavan, Dennis
McKay, Allen (Penistone)
Steel, Rt Hon David


Cowans, Harry
McQuade, John
Stott, Roger


Cryer, Bob
Paisley, Rev Ian



Cunliffe, Lawrence
Pendry, Tom
TELLERS FOR THE AYES


English, Michael
Penhaligon, David
Mr. Alan Beith and Mr. Clement Freud


Evans, John (Newton)
Robinson, Peter (Belfast East)



NOES


Adley, Robert
Clarke, Kenneth (Rushcliffe)
Hawkins, Paul


Alexander, Richard
Clegg, Sir Walter
Hawksley, Warren


Ancram, Michael
Colvin, Michael
Heddle, John


Arnold, Tom
Cope, John
Henderson, Barry


Atkins, Robert (Preston North)
Corrie, John
Heseltine, Rt Hon Michael


Baker, Kenneth (St. Marylebone)
Costain, A. P.
Hicks, Robert


Baker, Nicholas (North Dorset)
Cranborne, Viscount
Higgins, Rt Hon Terence L.


Banks, Robert
Dean, Paul (North Somerset)
Hogg, Hon Douglas (Grantham)


Beaumont-Dark, Anthony
Dorrell, Stephen
Holland, Philip (Carlton)


Benyon, Thomas (Abingdon)
Douglas-Hamilton, Lord James
Hooson, Tom


Best, Keith
Dover, Denshore
Howell, Ralph (North Norfolk)


Bevan, David Gilroy
Dunlop, John
Hunt, David (Wirral)


Biffen, Rt Hon John
Dunn, Robert (Dartford)
Hunt, John (Ravensbourne)


Biggs-Davison, John
Durant, Tony
Jenkin, Rt Hon Patrick


Blackburn, John
Dykes, Hugh
Jessel, Toby


Blaker, Peter
Edwards, Rt Hon N. (Pembroke)
Johnson Smith, Geoffrey


Boscawen, Hon Robert
Eggar, Timothy
Jopling, Rt Hon Michael


Bottomley, Peter (Woolwich West)
Elliott, Sir William
King, Rt Hon Tom


Bowden, Andrew
Eyre, Reginald
Kitson, Sir Timothy


Bradford, Rev. R.
Fairbairn, Nicholas
Knight, Mrs Jill


Braine, Sir Bernard
Faith, Mrs. Sheila
Knox, David


Bright, Graham
Finsberg, Geoffrey
Lamont, Norman


Brinton, Tim
Fisher, Sir Nigel
Lang, Ian


Brittan, Leon
Fookes, Miss Janet
Lawrence, Ivan


Brooke, Hon Peter
Forman, Nigel
Lee, John


Brown, Michael (Brigg &amp; Sc'thorpe)
Fox, Marcus
Lennox-Boyd, Hon Mark


Browne, John (Winchester)
Fraser, Peter (South Angus)
Lester, Jim (Beeston)


Bryan, Sir Paul
Garel-Jones, Tristan
Lloyd, Peter (Fareham)


Buck, Antony
Goodhart, Philip
Loveridge, John


Budgen, Nick
Gorst, John
Luce, Richard


Bulmer, Esmond
Gow, Ian
Lyell, Nicholas


Butcher, John
Greenway, Harry
Macfarlane, Neil


Butler, Hon Adam
Grieve, Percy
MacGregor, John


Cadbury, Jocelyn
Griffiths, Eldon (Bury St. Edmonds)
Mackay, John (Argyll)


Carlisle, John (Luton West)
Griffiths, Peter (Portsmouth N)
Macmillan, Rt Hon M. (Farnham)


Carlisle, Kenneth (Lincoln)
Gummer, John Selwyn
McNair-Wilson, Michael (Newbury)


Chalker, Mrs. Lynda
Hampson, Dr Keith
Major, John


Churchill, W. S.
Hannam, John
Marland, Paul


Clark, Hon Alan (Plymouth, Sutton)
Haselhurst, Alan
Marshall, Michael (Arundel)




Marten, Neil (Banbury)
Pawsey, Jamas
Stewart, Ian (Hitchin)


Mates, Michael
Percival, Sir Ian
Stewart, John (East Renfrewshire)


Mather, Carol
Pink, R. Bonner
Stradling Thomas, J.


Maude, Rt Hon Angus
Pollock, Alexander
Taylor, Robert (Croydon NW)


Mawhinney, Dr Brian
Porter, George
Taylor, Teddy (Southend East)


Maxwell-Hyslop, Robin
Proctor, K. Harvey
Temple-Morris, Peter


Mayhew, Patrick
Raison, Timothy
Thompson, Donald


Mellor, David
Rathbone, Tim
Townend, John (Bridlington)


Meyer, Sir Anthony
Rees, Peter (Dover and Deal)
Townsend, Cyril D. (Bexleyheath)


Miller, Hal (Bromsgrove &amp; Redditch)
Rees-Davies, W. R.
Tripper, David


Mills, Iain (Meriden)
Renton, Tim
Trotter, Neville


Mills, Peter (West Devon)
Rhodes James, Robert
Vaughan, Dr. Gerard


Mitchell, David (Basingstoke)
Rifkind, Malcolm
Viggers, Peter


Moate, Roger
Roberts, Wyn (Conway)
Waddington, David


Monro, Hector
Rossi, Hugh
Wakeham, John


Montgomery, Fergus
Sainsbury, Hon Timothy
Waldegrave, Hon William


Morris, Michael (Northampton, Sth)
Shaw, Giles (Pudsey)
Walker, Bill (Perth &amp; E Perthshire)


Morrison, Hon Charles (Devizes)
Shaw, Michael (Scarborough)
Ward, John


Morrison, Hon Peter (City of Chester)
Shelton, William (Streatham)
Warren, Kenneth


Murphy, Christopher
Shepherd, Colin (Hereford)
Wells, John (Maidstone)


Myles, David
Shersby, Michael
Wells, Bowen (Hert'rd &amp; Stevn'age)


Neale, Gerrard
Silvester, Fred
Wheeler, John


Needham, Richard
Smith, Dudley (War, and Leam'ton)
Whitney, Raymond


Nelson, Anthony
Speller, Tony
Wickenden, Keith


Newton, Tony
Spence, John
Wilkinson, John


Osborn, John
Spicer, Michael (S Worcestershire)
Williams, Delwyn (Montgomery)


Page, Rt Hon Sir R. Graham
Sproat, Iain
Young, Sir George (Acton)


Page, Richard (SW Hertfordshire)
Squire, Robin
Younger, Rt Hon George


Parkinson, Cecil
Stanbrook, Ivor



Parris, Matthew
Stanley, John
TELLERS FOR THE NOES:


Patten, Christopher (Bath)
Steen, Anthony
Mr. Spencer Le Marchant and Mr. Anthony Berry


Patten, John (Oxford)
Stevens, Martin



Pattie, Geoffrey

Question accordingly negatived.

Amendments made: No. 159, in page 56, line 19, leave out paragraph (b).

No. 160, in page 56, line 21, leave out from beginning to 'of' in line 23 and insert—
'(2) Regulations under subsection (1) above may provide for the transfer—
(a)'.

No. 161, in page 56, line 27, at end add—
'(b) of prescribed fees received in respect of any application or class of applications by a district planning authority in Scotland to a regional planning authority where the regional planning authority have exercised the powers conferred upon them by section 179(1) of the Local Government (Scotland) Act 1973.'.

No. 162, in page 56, line 27, at end add—
'(2A) The Secretary of State may by regulations make such provision as he thinks fit for the payment to him of a fee of the prescribed amount in respect of an appeal to him under the planning enactments.
(2B) Regulations under subsection (1) or (2A) above may provide for the remission or refunding of a prescribed fee (in whole or in part) in prescribed circumstances.'.

No. 163, in page 56, line 28, after 'under' insert
'subsection (1) or (2A) of '.

No. 164, in page 56, line 30, leave out from 'No' to second 'of' in line 32 and insert

'such regulations shall be made unless a draft of the regulations has been laid before and approved by resolution of each House'.

No. 165, in page 56, line 41, after 'under' insert 'subsection (1) or (2A) of'.—[Lord James Douglas-Hamilton.]

Clause 72

LOCAL PLANS—EXPEDITE PROCEDURE

Mr. Fox: I beg to move amendment No. 166, in page 57, line 2, leave out 'section' and insert 'sections'.

Mr. Deputy Speaker (Mr. Bryant God-man Irvine): With this it will be convenient to discuss Government amendments Nos. 167 and 169.

Mr. Fox: The amendments are technical. Amendments Nos. 166 and 169 are consequential to amendment No. 167.

Amendment agreed to.

Amendment made: No. 167, in page 58, line 17, at end add—
15B.—(1) It shall be the duty of a county planning authority—

(a) on the approval of a structure plan, to consider whether any local plan which has been adopted for part of the area to which the structure plan relates, or which has been approved by the Secretary of State for part of that area, conforms generally to the structure plan; and
(b) on the approval of proposals for the alteration of a structure plan, to consider whether any local plan which has


been adopted for an area affected by the alterations, or which has been approved by the Secretary of State for such an area, conforms generally to the structure plan as altered.
(2) Not later than the expiration of the period of one month from the date on which the county planning authority receive notice of the Secretary of State's approval of a structure plan they shall send—

(a) to the Secretary of State; and
(b) to every district planning authority who prepared for any part of the area to which the structure plan relates a local plan which has been adopted or which has been approved by the Secretary of State,
a copy—

(i) of a list specifying every such local plan as is mentioned in subsection (1)(a) of this section which they certify to conform generally to the structure plan; and
(ii)of a list specifying every such plan which in their opinion does not so conform.
(3) Not later than the expiration of the period of one month from the date on which the county planning authority receive notice of the Secretary of State's approval of proposals for the alteration of a structure plan, they shall send—

(a) to the Secretary of State; and
(b) to every district planning authority who prepared a local plan which has been adopted or which has been approved by the Secretary of State and which is for an area which will be affected by the alterations,
a copy—

(i) of a list specifying every such local plan as is mentioned in subsection (1)(b) of this section which they certify to conform generally to the structure plan as altered; and
(ii) of a list specifying every such plan which in their opinion does not so conform.'.—[Mr. Fox.]

Mr. Fox: I beg to move amendment No. 168, in page 58, line 31, leave out from 'the"' to end of line 34.

Mr. Deputy Speaker: Mr. Deputy Speaker With this it will be convenient to discuss Government amendment No. 243.

Mr. Fox: These are technical amendments to bring together in schedule 11 all the provisions relating to the application of the planning provisions in the Bill for the Isles of Scilly.

Amendment agreed to.

Amendments made: No. 169, in page 58, line 36, after 'by' insert
'the first of the sections inserted in the Town and Country Planning Act 1971 by'

No. 170, in page 58, line 37, leave out 'this section comes into effect' and insert 'the passing of this Act'.—[Mr. Fox.]

Clause 75

AMENDMENTS RELATING TO COMPULSORY ACQUISITION

Mr. John Wilkinson: (Ruislip-Norwood): I beg to move amendment No. 171, in page 59, leave out lines 6 to 17 and insert—
'(1) The Secretary of State may authorise a local authority to whom this section applies to acquire compulsorily any land within their area if he is satisfied—

(a) that the land is suitable and is required for one or more of the following activities, namely, development, redevelopment and improvement having regard to—

(i) the provisions of the development plan, so far as material,
(ii) whether planning permission for any development on the land is in force or has been refused, and
(iii) any other considerations which, on an application for planning permission for development on the land would be material for the purpose of determining that application,

(b) that it is necessary to acquire the land immediately to achieve a purpose in the interests of the proper planning of an area in which the land is situated having regard to the matters mentioned in subsection (a) above.'.

Mr. Deputy Speaker: With this we can discuss Government amendments 172 to 175 and Government amendments 177 to 180.

Mr. Wilkinson: I shall be brief, and I shall be blunt. We do ourselves no credit in debating a subject as important as compulsory acquisition at 0150 hours, with hon. Members reduced to ashenfaced zombies on the Benches.
However, in the background to this amendment there is an experience of the abuse of powers of compulsory purchase which was perpetrated for many years by the former Socialist administration of the borough of Hillingdon. These powers were abused to pursue housing programmes which amounted to no less than municipal vandalism and which were promoted out of petty spite for political objectives and amounted to no less than social engineering. The House should be aware of what transpired in Hillingdon in case powers of this kind are sought to be abused again.
No home owner could feel safe in the borough. People feared the arrival of an official brown envelope from the civic centre with the morning mail. They feared even more the news that, perhaps, a house down the road had been compulsorily purchased, because they knew that if that was the case blight would descend on values within the road and they would not be able to sell their houses to anyone else except the local authority, and probably then only at depressed prices. We in Hillingdon at that time witnessed the most monstrous and unscrupulous exploitation by a local authority of powers of compulsory acquisition.
Even a planning inquiry afforded no redress to owner-occupiers. Sometimes the reports of the inspector would be overruled by the Secretary of State and, anyway, local residents had no confidence that the Secretary of State would act independently over appeals because he probably shared the same political aspirations as the Socialist local authority, namely, aspirations that municipalisation should be extended as widely as possible in housing. It was as a result of this that my hon. Friend the Member for Uxbridge (Mr. Shersby) introduced his Compulsory Purchase Appeal Tribunal Bill which sought to ensure that an independent tribunal would be set up which would adjudicate in appeals on compulsory acquisition questions.
The amendment was drafted by a constituent, and I pay tribute to his diligence and the wise professional advice which I received from him. I recognise that the Government have tabled two amendments, Nos. 175 and 180, which are almost identical to my amendment. I am grateful to the Government for receiving a deputation comprising myself and my hon. Friend the Member for Uxbridge, and for moving so far towards what we have sought to achieve in our own amendment. However, I must point out that our amendment aims to ensure that the land which a local authority seeks to acquire compulsorily is really required for development, redevelopment or improvement and not just for social engineering or political motives. Secondly, it is not good enough that the opinion of the local authority should be sufficient for compulsory purchase schemes to be proceeded with. These

schemes must be in line with the development plan and with existing planning permission as far as is practical.

Mr. Shersby: I apologise for detaining the House at this late hour, but I assure you, Mr. Deputy Speaker, and the House that there is no subject which has such importance for my constituents in Uxbridge or for those of my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) as that of compulsory purchase. Our constituents have gone through the most terrible period of intimidation by a Socialist council in the past and they have vivid memories of that situation which will take many years to disappear. If my hon. Friend the Member for Ruislip-Northwood and myself have any duty to our constituents, it is to acquaint the House of these matters and to explain the importance of the amendment which my hon. Friend moved.
I therefore crave the indulgence of the House for a few moments while I elaborate on this very important matter which I am sure is important also to other hon. Members for Greater London constituencies and for constituencies in other big cities.
When I first studied the clause I was deeply concerned, because it appeared to me that, in their laudable desire to simplify the law, my right hon. Friend and his colleagues were unwittingly making it even easier for a local authority to acquire land by means of compulsory purchase without there being adequate safeguards for the citizen. Consequently my hon. Friend and I made urgent representations to my right hon. Friend and his colleagues that the clause be amended and that what we regard as absolutely essential safeguards be introduced. I therefore welcome warmly the Government's amendments, to which my hon. Friend the Member for Ruislip-Northwood referred and which go a very long way towards providing the safeguards which we believe to be so important.
It is a very important lesson for the House and for Ministers in the Department of the Environment to learn that, when we are discussing provisions which confer upon local authorities the ability to deprive citizens of their home and their land, for the purposes of redevelopment, it is necessary for us to pay great


attention and ensure that what we are doing is such that the British citizen's home remains his castle. As the clause is drafted, that would no longer be the case.
Section 112 of the Town and Country Planning Act 1971 specifies four criteria for compulsory purchase. The compulsory purchase can go ahead only if the Secretary of State is satisfied that it is necessary because one of those four criteria has been satisfied. The clause as drafted reduces the number of criteria to two. Unfortunately, it means that a local authority acting on its own opinion would be able to acquire land which it considered suitable for development or for what is called proper planning in the area, without the safeguard of the Secretary of State's approval.
I shall not detain the House by going into detail about the iniquities of clause 75 as it stands, because the hour is very late. All that I should like to say is that the amendment that my hon. Friend has moved and the amendments that the Government have tabled remove our main objections to the clause. They insert in its place some very important criteria which will give substantial safeguards to the citizens. That is welcome, and I pay tribute to my hon. Friend for his courtesy and consideration in dealing with this important matter.
2 am
I appeal to my right hon. Friend to look again at the machinery which exists to enable the citizen to appeal against a decision taken by a local authority, and confirmed by the Secretary of State, to dispossess him of his home and his land for the purposes of redevelopment. The present appeal mechanism is inadequate, because it is open to the suspicion that there has been collusion between a local authority and the Secretary of State. Most of us in this House would believe that that was not so, but many citizens who are in the position of being dispossessed of their land find that very hard to accept. 
I have urged my right hon. Friend on several previous occasions that some form of independent appeal mechanism is required so that anyone who is dispossessed of his land or premises for the purpose of redevelopment—perhaps in the national

interest—will have the opportunity to submit his case to an independent tribunal, and only if the tribunal confirm the decision of the Secretary of State will it go ahead. 
If that were to be done, a great deal of misery which afflicts people who are dispossessed would be removed, because they would know that the decision had been taken on an entirely independent and semi-judicial basis, and at least they would feel that in giving up their home or land they were doing so in the overriding national interest. I hope, therefore, that my right hon. Friend will examine that point. 
The Bill is not the only piece of legislation which affects compulsory purchase powers. There are, for example, the Housing Acts. I hope that my hon. Friends will not feel that by amending the clause we shall be dealing with the evil which exists, namely, the power of local authorities—and, indeed, the Government—to dispossess the citizen of land or property without proper appeal and without their being taken from him on proper grounds. 
I ask my right hon. Friend to institute a departmental review of the statutory powers which enable a local authority compulsorily to acquire land, and to introduce in due course amending legislation to tighten up the procedure for compulsory purchase. It should be on the statute book in a form which is very much more acceptable to the citizens of our country. This is a vital and important matter; it goes to the basis of freedom and democracy in our country as we understand it. 
Our constituents in the borough of Hillingdon have had good cause in the not too recent past to recognise that their abiliy to live undisturbed in their homes can be threatened by legislation which is still on the statute book and will not be affected by the amendments to the Bill.

I apologise to the House for detaining it at this late hour, but I feel that this is such an important matter that it has to be aired in the House tonight.

Mr. Rippon: I do not think that my hon. Friends ought to apologise for the signal service that they have rendered by raising this matter. I entirely agree with what they have had to say about the nature of the clause as it stands.
We ought to contemplate for a moment the process by which legislation is prepared in such a way that a clause of this kind can be put into a Bill and go right through the Committee stage and be closely looked at, as far as I can see, by my two hon. Friends only at this late stage on Report. [Interruption.] My right hon. Friend the Minister for Local Government and Environmental Services suggests that I should read the Official Report of the Standing Committee, but I should have thought that the amendments could be accepted at that stage. It may be that I am being unfair to my right hon. Friend and that undertakings were given that I have not carefully considered.
There was no doubt that the clause, as originally drafted, contained wide powers from which I should have thought the Government would recoil immediately and with horror. It is difficult to imagine a wider power that did not authorise a local authority to take any land at any time for any purpose.
I apologise to my right hon. Friend the Minister if I am being unfair in not taking sufficient notice of the undertakings that he evidently gave in Committee. But it is valid to consider how, in the process of drafting legislation—and a lot of care should be taken before it is put before the House—such a clause could ever be included in a Bill presented by a Conservative Government. I can only suggest that it is because the sheer volume of legislation that is now before the House is too great to be digested.

Mr. Hattersley: I wish to give the Minister credit. The right hon. and learned Member for Hexham (Mr. Rippon) wondered how such a provision could be included in the Bill without the Government recoiling. I must say on behalf of the Minister that he did recoil the moment I pointed out in Committee what his Bill meant.

Mr. Fox: I must tell my right hon. and learned Friend the Member for Hexham (Mr. Rippon) that the clause now presented is different from that initially presented in Committee. I am glad that in their brief observations my hon. Friends the Members for Ruislip-Northwood (Mr. Wilkinson) and Uxbridge (Mr. Shersby) paid tribute to the considerable progress that we have

made towards improving these measures. Compulsory purchase orders are always a matter of last resort. On many occasions they have caused considerable hardship. I assure the House that I shall constantly consider these matters. If there is any need to take action, I shall obviously contact my hon. Friends again.
Four Government amendments have a bearing on the amendment tabled by my hon. Friends. Having gone so far to meet them, I believe that it is only a difference on a matter of words that stands between us. In practice, many of the evils that they have drawn to my attention will be resolved. I hope, with those few remarks, that my hon. Friend will ask leave to withdraw the amendment.

Mr. Wilkinson: I am grateful to my hon. Friend the Under-Secretary. I pay tribute to the outstanding contributions made by my right hon. and learned Friend the Member for Hexham (Mr. Rippon) in the earlier debates and also this morning. His wisdom and experience have been invaluable to the House. I think that the other place should address itself to clause 75 and consider it further. There are major issues involved. We are grateful for the help that we have received from our right hon. and hon. Friends in the Department. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 172, in page 59, line 9, leave out 'in their opinion'.

No. 173, in page 59, line 10, after 'for' insert—
'and is required in order to secure the carrying out of'.

No. 174, in page 59, line 13, leave out
'in their opinion, it is expedient to acquire'
and insert
'is required'.

No. 175, in page 59, line 17, at end add—
'(1AA) A local authority and the Secretary of State in considering for the purposes of subsection (1)(a) above whether land is suitable for development, re-development or improvement shall have regard—

(a) to the provisions of the development plan, so far as material;
(b) to whether planning permission for any development on the land is in force; and


(c) to any other considerations which, on an application for planning permission for development on the land, would be material for the purpose of determining that application.'.—[Mr. King.]

Clause 76

TOWN AND COUNTRY PLANNING— SCOTLAND

Mr. Fox: I beg to move amendment No. 176, in page 60, line 11, leave out 'ten' and insert 'seven'.

Mr. Deputy Speaker: With this we may take Government amendment No. 236.

Mr. Fox: These amendments keep Scottish legislation in line with provisions for England and Wales and correspond to the amendments to clause 75 and schedule 11.

Amendment agreed to.

Amendments made: No. 177, in page 60, line 22, leave out 'in their opinion'.

No. 178, in page 60, line 23, after 'for', insert—
'and is required in order to secure the carrying out of'.

No. 179, in page 60, line 26, leave out—
'in their opinion, it is expedient to acquire'
and insert 'is required'.

No. 180, in page 60, line 30, at end add—
'(1AA) A local authority and the Secretary of State in considering for the purposes of subsection (1)(a) above whether land is suitable for development, re-development or improvement shall have regard—

(a) to the provisions of the development plan, so far as material;
(b) to whether planning permission for any development on the land is in force; and
(c) to any other consideration which, on an application for planning permission for development on the land, would be material for the purpose of determining that application.'.—[Mr. King.]

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): I beg to move amendment No. 181, in page 61, line 14, at end insert—
'(8) Section 71 above extends to Scotland, and this section extends to Scotland only but, subject to that, this Part of this Act does not extend to Scotland.'.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 215 and 216.

Mr. Rifkind: These are technical amendments which set out the extent to which part IX of the Bill applies to Scotland.

Amendment agreed to.

Clause 80

PUBLIC ACCESS TO INFORMATION IN REGISTER

Mr. Fox: I beg to move amendment No. 182, in page 63, line 6, leave out from 'hours' to end of line 7.
During consideration of the clause in Committee on 22 April we undertook to look again at the provision for councils to make a reasonable charge for inspection of the register. This has been done, and the principle of free access to the register has been accepted.

Amendment agreed to.

Clause 96

CLAIMS FOR COMPENSATION FOR DEPRE- CIATION WHICH ARE OUT OF TIME ON COMMENCEMENT DATE

Mr. Fox: I beg to move amendment No. 185, in page 73, line 35, at end insert
'either that period is a period of not more than six months or'.

Mr. Deputy Speaker: With this we may take Government amendment No. 186.

Mr. Fox: My right hon. Friend the Minister of Transport has received representations about the provisions for interest in this clause as originally drafted. Concern was also expressed in Committee that adequate provision should be made for the payment of interest on new claims. There was a speech on this matter. The amendment rectifies considerable hardship to people who had not been properly contacted about claims that had been made. This has been put right, including the payment of interest.

Amendment agreed to.

Amendment made: No. 186, in page 73, line 36, leave out from '22nd October 1979' and insert 'the commencement date'.—[Mr. Fox.]

Clause 100

EXTENSION OF POWERS TO MAKE GRANTS FOR RECLAMATION OF LAND

Mr. Fox: I beg to move amendment No. 187, in page 76, line 22, leave out from 'applies' to end of line 23.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 188 and 189.

Mr. Fox: Amendment No. 187 is a technical amendment.
Amendment No. 188 relates to section 9 of the Local Government Act 1966. As it appears in clause 100, it is inaccurate in its application to the time before it comes into force. In this period section 9 operates in its original form, but the way that subsection (1)(b) has been drafted in the printed text means that the Secretary of State could pay grant on expenditure incurred between 1967 and the passing of the Bill on approved works for the reclamation or improvement of land, including land which is not derelict and is within the new subsection only by reason of underground mining operations and he could pay grant on expenditure incurred by persons other than a local authority. Neither of these circumstances was within section 9(1) of the 1966 Act before this Bill. This was not intended, and the new subsection puts this right.
Secondly, some redrafting has been undertaken.
Amendment No. l89 fulfils the indication given in Committee that the Government expected to attend to section 8 of the Local Employment Act in taking forward clause 100 at a later stage.

Mr. Roger Stott: I understand that we are now drawing to the end of the proceedings for today. My hon. Friends and I would wish merely to comment on the amendments. It is not our intention to divide the House. We wish to use this opportunity to draw to the Minister's attention some real and serious problems that we face, particularly in the county of Greater Manchester, Newton and Westhoughton concerning derelict land.

Mr. Walter Harrison: And in Yorkshire.

Mr. Stott: And, as my right hon. Friend the Member for Wakefield (Mr. Harrison) points out, in Yorkshire as well. I have no doubt that the Minister will bear in mind the points that I am about to make, because he understands the need for some action, particularly as he represents a Yorkshire constituency.
2.15 am
While these amendments do not necessarily satisfy or deal with the problems that we wish to discuss, it is necessary to put on record the real and deep concern that is felt by people in our county and in our local authorities area about derelict land. The Greater Manchester council has 8,500 acres of derelict land, of which 8,000 acres are considered to be in need of reclamation. It has more derelict land than any other county in England, excluding Cornwall, which has about 11,000 acres, most of which is rural derelict land caused primarily by the mining of tin and may not be justifiably included in the reclamation scheme.

The figures that I have quoted are taken from the 1974 survey of derelict and despoiled land carried out nationally by local authorities at the request of the Department of the Environment. No new survey has been carried out since that date. But local knowledge suggests that in the Greater Manchester area the situation is not improving in overall terms. More land is becoming derelict due to the decline in industry and the rationalisation of both public and private organisations, causing plant and buildings to be made redundant and in need of reclamation before they can be put to good and productive use.

The definition of what is acceptable for derelict land grant is widening as the knowledge of the nature of dereliction and what has to be done makes the problem of land reclamation more concentrated.

I draw the Minister's attention to the problems that my hon. Friend the Member for Newton (Mr. Evans) and I face. Derelict land in our local area and in the county of Greater Manchester comprises mainly pit waste, mine shafts, slurry lagoons, the remains of pithead buildings, old sewage works, sludge beds, sites of old gas works, sites of worked-out quarries, sites of redundant power stations,


former mineral workings, derelict canals and sundry other examples that we could quote if the hour was not so late.

We have a terrible, concentrated problem of wide expanses of derelict land brought about largely by the evolution of the Industrial Revolution. Lancashire and Yorkshire have been been the engine house of that Industrial Revolution and the environmental problems that ensue from it. The scale of the problem is enormous. As I pointed out earlier, we have 8,500 acres of derelict land, of which 8,000 acres are considered necessary for reclamation.

The main attack on dereliction in Greater Manchester is being made by the county council, through joint reclamation schemes and joint reclamation teams. The aim is to build up the competence and efficiency of those terms. However, other work is being carried out by the local district authorities, particularly in Wigan. In the metropolitan borough of Wigan there is a good team of reclamation engineers and a reclamation team dealing with the terrible and enormous problems of land reclamation. That leaves the Greater Manchester council free to concentrate on the more technical, difficult problems of land reclamation.

I have tried in a rather convoluted debate to give an example of the magnitude of the problem. I have tried to indicate that the reclamation programme in the Greater Manchester area is of very great importance to our local authorities. The problem has arisen as a consequence of the decision of the Secretary of State for Industry, who is busily redesignating areas of the United Kingdom—areas which were formerly intermediate areas enjoying intermediate area status. With that status went the 100 per cent. derelict land grant.

In Greater Manchester there are areas that are no longer to be considered as intermediate areas. Are we to take it, therefore, that, as a consequence of the decision of the Secretary of State for Industry, our local and county authorities will no longer be able to claim the 100 per cent. derelict land grant?

We need answers to these questions. My hon. Friends the Members for Newton and for Leigh (Mr. Cunliffe) were both members of the Standing Committee on the Industry Bill, which is now an Act,

and continually probed the Secretary of State for Industry about this problem. To date, we have had no satisfactory answer.

By 1982, when the local authorities are considering their schemes for reclamation, they will not know where the finance will come from. The problem is of enormous proportions in the North-West, as the Minister will clearly understand. What we want from him is answers to some very pertinent questions. What will happen in those areas that formerly enjoyed intermediate area status, together with the 100 per cent. derelict land grant? Will they continue to receive that grant? If they do not, we shall have one hell of an environmental problem. The Under-Secretary or the Secretary of State for the Environment can take time out from Henley-on-Thames and come to Wigan, or Newton, or Wakefield, or Tameside, or anywhere in that area where we have had these problems and look for himself at the enormity of our problem.

The Government have a responsibility not just to this House and to me tonight but to my local authority and my county authority, to tell them what they intend to do about this problem. We have had no answer on the issues that we have continually raised with Ministers.

There is another problem that we face. The Wigan travel-to-work area has been upgraded and now has special development area status. The other part of the Wigan metropolitan borough, Leigh, has been downgraded from intermediate area status to nothing. Yet the Greater Manchester council has reclamation schemes spanning the two areas. Will one part of the area get the 100 per cent. derelict land grant and the other not get it? If so, it makes the whole system an absolute farce. We need some clarification on this issue because of the problems in Lancashire and Yorkshire.

The whole argument about reclamation is part of a wider debate on the need for our constituencies in the North-West to receive national assistance in tackling their deep-seated economic problems. There is undoubtedly a case to be made for such assistance. Whatever the merits of the different forms of aid available, the 100 per cent derelict land grant comes high on any list of measures that the


Government can give to us in the North-West to try to eradicate some of our awful problems. I have put my point in a spirit of endeavour. I have genuinely tried to elicit information. I have tried not to make party points. We need early clarification of the issues.

Mr. John Evans: I do not intend to apologise to the House for detaining it at 2.24 am. I am extremely angry that we have had to raise such an important subject at this ridiculous hour. Clause 100 is important to many authorities, particularly those in the North and others that have lost their assisted area status. The Minister used only a handful of words to introduce the amendments. The Government have rewritten clause 100, and that is not good enough.
The question of derelict land was discussed at length, both in Committee and on the Floor of the House, during the passage of the Industry Bill. We mentioned the serious problems facing local authorities that were being downgraded from assisted area status to no status. In response to our amendments, which sought to protect such local authorities, it was said that a working party from the Department of the Environment and the Department of Industry was considering this awkward and vexed problem. I assume that the clause has been rewritten as a result of that working party.
I am highly suspicious of the rewritten clause. The original clause led one to assume that local authorities that had lost assisted area status might have been covered. The clause provides that
the Secretary of State may, with the consent of the Treasury, pay to any person out of money provided by Parliament grants of such amounts and payable at such times and subject to such conditions as he may from time to time determine in respect of relevant expenditure.
It appears from the original wording that the problems of Wigan, St. Helens, Warrington, Tameside and of many other authorities in the North could have been solved.
There is a large amount of gobbledegook in the rewritten clause. When one examines the new wording, one suspects that it will not give succour to authorities which have lost their assisted area status. However, I hope that the Minister will tell me that I am wrong.
There is an anomaly about derelict land clearance areas. As a result of the Local Employment Act 1972, some areas with particular problems and vast amounts of derelict land were designated derelict land clearance areas, although they did not have assisted area status. They were not affected by the Industry Bill.
I am suspicious of the words contained in amendment No. 189. I shall not quote the whole amendment, as I do not wish to bore the House, but subsection (1) states:
(1) Where it appears to the Secretary of State—

(a) that any land in a development area or intermediate area (in this section referred to as 'the relevant land')—

(i) is derelict, neglected or unsightly, or"
I suspect that that means that lands which are derelict, or areas which are derelict land clearance areas, risk losing that status. My interpretation of clause 100 as rewritten is that only assisted areas—development areas or special development areas—will qualify for help from the Secretary of State to clear derelict land.
If that is the case, a number of hon. Members who are probably sleeping soundly in their beds at present will, in the not-too-distant future, suddenly find representations made to them by their local authorities that at this hour of the morning they have lost their assisted area status.

I wish to reinforce one or two of the points made by my hon. Friend the Member for Westhoughton (Mr. Stott). He rightly pointed out that areas which suffer from this problem have suffered from industry which has long since departed—steelworks chemical plants, shipyards, old pit workings, and so on. Such problems plague many of our areas. I am sure that hon. Members will recognise that clearing those areas is an extremely expensive, long-term business.

Some local authorities are in the middle of fairly long-term contracts to clear vast areas of derelict land on which it would appear they will lose grant. No one has given a satisfactory answer to local authorities which have entered into a contract to clear the land. What will happen


from 1 August, when their assisted area status finishes?

One of the finest phrases that I have ever heard—and I certainly wish that I had coined it—was "Let the polluter pay". That was coined by the present Minister of Agriculture, Fisheries and Food when he was speaking about environmental pollution flowing from the workings of industry. But I remind hon. Members that the worst form of pollution is destruction of the land itself.

There is no question but that areas such as the one that I represent desperately need assistance from the rest of the country to bring back land that was once used for productive industry. Whether that land would be used for industry, commerce, housing, open space, or farm land is immaterial. The problem is that there are horrendous eyesores which we could return to beneficial use if the Government recognised their duty. I hope that the Minister will deal with the point about the problems of areas which have lost their status because they are part of a travel-to-work area, although they are also part of a local authority area which has, in another part, retained its status.

The case of Wigan was mentioned. This was a "Paddy's rise" if ever there was one. The town was raised from assisted area status to development area status. The people all cheered madly until they found out that they would receive less as a development area than they would as an all-assisted area, because of the reduction in the level of grants. Consequent upon that, other parts of the Wigan area, including Golborne, in my constituency, lost their status altogether. We now have the farcical situation that Wigan, which has overlapping derelict land areas with Golborne, will qualify for grant to clear to the Golborne border, although no grant will be made available to clear the eyesores in the old Golborne district. That does not make sense.

In my constituency there is a wide spread of local authorities. Newton-le-Willows comes under the St. Helens metropolitan district council. St. Helens was downgraded from special development to development area status, with a consequent heavy loss of grant. Newton-le-Willows is also part of the Warrington

travel-to-work area. Warrington had its status entirely removed. In the days of the Industrial Revolution a firm's building plant did not stop at the border of an urban district. That applies particularly to old pit heaps. St. Helens metropolitan district council could clear old pit heaps until it reached the old Newton-le-Willows urban district boundary, but I assume that it would have to stop there because of the horrendous sum that it would cost that authority, which does not qualify for a grant. That is farcical. If the local authority clears away derelict pit heaps up to the now non-existent boundary of Newton-le-Willows urban district council, and leaves the remaining pit heaps, what will the local people think? It is nonsense.

Vast areas in the North are facing similar problems. During the passage of the Industry Bill the Government undertook to look at the problem. Their solution has been to drop other areas from the derelict land clearance scheme. Amendment No. 189 appears to indicate that only assisted areas will quality for grants.

It is of vital importance to clear derelict land. I am tired of hearing the Secretary of State for Industry talk of entrepreneurs who will rebuild our country. Industrial dereliction is a great problem in the North. It will take large sums of money to clear. When industrialists see the dereliction in the North, they ask what time the next train leaves for London. They find the new towns surrounding London much more attractive. There they are offered buildings and other facilities in pleasant areas, with easy communication with London. If the Government want to ensure that the North participates in the country's regeneration, they should pay attention to the problems that we have highlighted during discussions on this Bill and on the Industry Bill. We have put forward reasonable, sensible, non-partisan suggestions. The Government should put aside their prejudices. I am prepared to put aside my prejudices, although I do not believe that we shall see a regeneration under this Government.

The Government should not regard each and every cut in public expenditure as beneficial. A great deal of public expenditure is of immense value. Nowhere is expenditure more beneficial than


in clearing derelict land. There is a tremendous job to be done in the North. The Bill comes nowhere near tackling the problems.

I suspect that, far from honouring the promise given to us during debates on the Industry Bill that the working party was aware of the problems and would consider them carefully, the Government are taking an axe to the problem and will remove areas that think that they will continue to receive assistance under the 1972 Act. If I am wrong, I shall willingly withdraw that comment, but, even if I am wrong, the Government are doing nothing to assist areas such as Newton-le-Willows. Golborne, Warrington and Irlam and Cadishead, which have been gravely affected by the operation of the Industry Act and will be severely affected by the provisions of clause 100.

Mr. Cryer: This legislation is hybrid, because the definition of a derelict land clearance area is decided by the Department of Industry, either distinctly or in association with an intermediate, development or special development area. In the latter three cases, the derelict land clearance grants are 100 per cent. and are obtained by virtue of the status of an area. In the former case, the Department of Industry has the right to declare a DLCA and grants follow at 100 per cent., independent of the status of that area.
I want to be assured that amendment No. 188 retains that right of the Department so that the application of DLCA grants, once the status has been granted, is carried out by the Department of the Environment, which, oddly enough, has no role in the declaration of the status of an area.
It is important that the Department of the Environment should still be able to carry out derelict land clearance in areas that may not have employment problems. I recall, for example, that there are large gravel pits in Thurrock that are like pockmarks or a moonscape in some areas, but the level of unemployment was not sufficient—at least under the Labour Government—to give the district assisted area status.
Amendment No. 189 is relevant to the improvement of intermediate areas, because they are suffering higher than average levels of unemployment. I hope that the Secretary of State for the Environment

will apply the clause with vigour and enthusiasm and will persuade the Secretary of State for Industry that there is need for an expansion, rather than a contraction, of intermediate areas.
It is ironic that we are discussing the clause now—with Conservative Members keen and eager to follow the proceedings with assiduity—when, at the end of the month, as the Under-Secretary knows, because his constituency is the neighbour of my own, regional development grant finishes in Keighley as the start of the process to end intermediate area status.
In the light of the power in amendment No. 189, which virtually redrafts the clause, I want to see the possibility of using derelict land clearance powers available for an area such as my constituency. Under the amendment, grants can be made to enable a council to
acquire the relevant land or any other land which is reasonably required for the purpose of enabling the relevant land to be brought into use, or of improving its appearance".
A place such as Keighley, which does not have the same dereliction as Manchester or Wakefield, like most industrial areas in Yorkshire and Lancashire, has areas which could be used to provide jobs. A large area of the old gasworks might be used as an industrial estate, for example.
2.45 am
One of the signal achievements of the present Conservative Government is that after five years of Labour control, when the level of unemployment in Keighley was always below the national average, unemployment is now 7·4 per cent. above the national average that prevailed during the whole of the Labour Government's period of office. The amendment would add a string to the bow of the Bradford metropolitan district council since it would widen the possibility of jobs being attracted to the Keighley area. 
In the West Yorkshire area textile jobs are being lost at the rate of 500 a week. That is a drain which the area cannot afford. Shipley happens to be in the Bradford travel-to-work area which is retained as an intermediate area, so the problem does not arise. Shipley is like Keighley in many respects. It is an attractive town without many derelict eyesores, but it has advantages which are used to maintain jobs.
A few miles down the Aire valley a travel-to-work area is being denied intermediate area status. I have made strong representations to the Department of Industry to retain intermediate area status for Keighley to give it advantages such as European Investment Bank loans to create and retain jobs. 
Keighley depends on the vulnerable textile industry for its jobs. I hope that the Under-Secretary of State, who knows the area, will use his influence in Government to get some action on the textile industry. I do not want to stray too far down that path, because I should be out of order. However, this is an important issue and all the Labour Members with textile constituencies are making strong representations to try to staunch the loss of jobs. I regard such a power as important and relevant to areas such as Keighley. I hope that the power will be retained for my constituency.

There are a number of areas in the West Riding of Yorkshire which have now been robbed of intermediate area status by the Government. Some would argue that that is because they are represented, in some instances, by Labour Members, but that is a matter for debate.

The area around Wakefield, for example, has suffered grievously from dereliction and it is certainly an area where this sort of power is extremely important. But even if the qualification of intermediate area status is removed, I should like to conclude where I began by asking for the Minister's assurance that these amendments do not in any way remove or revoke the power of the Department of Industry to declare a DLCA without the necessity of intermediate area status, or whatever, being invoked as is laid down in amendment No. 189.

So many areas need DLCA status for their improvement. This is one of the areas where even the Government might have to admit that some intervention is required. The entrepreneurs of the nineteenth and early twentieth centuries excavated and plundered the soil of its mineral riches and took materials for road making, house building, concrete making or whatever. Scars are left and the local authorities do not have the financial resources to restore the land to make it fit for use by human beings once more.

It may be unfortunate that in the past local authorities did not have the support of legislation—and even if they did or thought they did—and often entered into agreements with companies which undertook excavations but where agreements turned out to be worthless because the local authorities did not have legislative backing. Or it could be that a local authority entered into agreements with companies which held a powerful position in an area at the time and the authority did not adequately protect the interests of the people concerned.

We are having to remedy the defects of previous generations, and it is important that we should have these powers. It is vitally important that we have legislation to ensure that past depredations are not repeated.

I look forward eagerly to haring from the Minister what I hope will be a reasonably comprehensive explanation. It does not matter that it is 2.52 am. In a few weeks we shall have several weeks' holiday. We are not badly treated so far as holidays are concerned and we often work through the night in this place. Therefore, the fact that it is 2.52 am is irrelevant. We are here to consider a Bill on Report.

I was not on the Committee, and several of my hon. Friends were not on the Committee and, therefore, we want as detailed and as reasonable an explanation as the Minister would give were it the close of Question Time and we were starting out fresh at 3.30 in the afternoon. The reply goes on the record in the same way as at any other time, and this is an important issue.

Mr. Fox: I am grateful to the hon. Member for Keighley (Mr. Cryer), as my next door neighbour, for drawing my attention to some of the problems that face that part of the world. I am grateful to all hon. Members who have taken part in the debate. They could not have a better friend than me, as a Minister at the Department of the Environment, in the sense that the areas they represent are certainly well known to me.
All the sneakers seem to have misunderstood the purpose of this clause and to have read rather too much into it. What we are seeking to do here is to take extra powers, but they are not really all that powerful. There were certain limitations on us.
I accept that we have taken only small steps forward, but that does not mean that the Government are not deeply concerned about the problem of dereliction. It is a problem that has concerned previous Governments for a considerable period. Britain has a record of which it can be proud. Admittedly many scars remain, but there are many industrial areas where a transformation has taken place over a few years. The areas that are represented by those who have taken part in the debate have taken up all the grants available to them. They have gathered some successful and professional teams to carry out the work.
The amendments seek to extend the scope of grants. Clause 100, even in its original wording, could not have attracted 100 per cent. grant. Section 9 of the 1966 legislation constricts the grant rate paid under the Act to 50 per cent. It is the 1972 Act, which is linked with the assisted areas and derelict land clearance areas, which attracts 100 per cent. grant. Clause 100 does not deal with designation. That issue is dealt with in the 1972 Act.
It has been suggested that the Bill provides an opportunity to do more than has been done. We are making representations. It has been drawn to the attention of the House that there is a conflict between my Department and the Department of Industry. I understand fully the concern of hon. Members. The designation of derelict land clearance areas when they lose assisted area status in 1982 is primarily a matter for my right hon. Friend the Secretary of State for Industry. The Departments have been studying closely which areas deserve continued eligibility for 100 per cent. grants. The Government hope to make a decision before long.
We understand that travel-to-work areas are different from constituency boundaries and that dereliction of the sort that we are discussing transcends county boundaries. It is of the utmost importance that we sort out the problem. I hope to make an announcement as soon as decisions have been made.

Mr. John Evans: I accept the helpful comments that the Minister has made and I am grateful to him. Amendment No. 189 states:
(2) The following subsections shall be substituted for subsections (1) to (5) of section 8

of the Local Employment Act 1972 (derelict land):—
'(1) Where it appears to the Secretary of State—
(a) that any land in a development area or intermediate area (in this section referred to as 'the relevant land')—".
I ask the Minister to check that that does not mean that areas that are scheduled not as assisted areas but as derelict land clearance areas will not be at risk of losing their status as a result of the amendment, which includes the words
any land in a development area or intermediate area".
I understand that the hon. Gentleman may not be able to answer that question at this hour. He is obviously informing the House that the Government are deliberately removing the status of such areas. I ask him to confirm that that will not happen inadvertently.

3 am

Mr. Fox: I shall check to ensure that what the hon. Gentleman fears is not the position. My reading of the issue is that he is wrong.
It is important that discussions are continued with my right hon. Friend the Secretary of State for Industry on the change of designation. We must examine what we can do for areas that are in considerable need and where it would be a failure on the Government's part if they were not to allow work to continue. I hope that hon. Members will realise that I am mindful of their anxieties. I shall watch these matters carefully.

Amendment agreed to.

Amendments made: No. 188, in page 76, line 37. leave out from 'land' to end of line 29 on page 77 and insert—
'or
(b) in or in connection with the carrying out of any such works as appear to the Secretary of State to be expedient for the purpose of enabling the land to be brought into use.
(1C) If subsection (1) above applies to land by virtue of subsection (1A)(a) above, "relevant expenditure" also includes expenditure incurred in or in connection with carrying out a survey of the land. with the approval of the Secretary of State, for the purpose of determining whether any works for its reclamation or improvement or for the purpose of enabling it to be brought into use should be undertaken (whether or not such works are carried out).
(1D) In relation to a local authority—
(a) the land to which subsection (1) above applies includes, in addition to land such as is mentioned in subsection


(1A) above, land which is not derelict, neglected or unsightly, but which is likely to become derelict, neglected or unsightly by reason of actual or apprehended collapse of the surface as the result of the carrying out of underground mining operations which have ceased to be carried out before the grant is paid and which were not excluded operations; and
(b) subsection (1) above shall have effect as if "relevant expenditure" included—
(i) expenditure incurred in or in connection with the acquisition at any time by the authority with the approval of the Secretary of State of any land to which subsection (1) above applies, including any land to which it applies by virtue of paragraph (a) above; and
(ii) expenditure incurred in or in connection with the carrying out of works such as are mentioned in subsection (1B)(a) above on or after 1st April 1967 but before the passing of the Local Government, Planning and Land Act 1980 other than works so carried out on land to which subsection (1) only applies by virtue of paragraph (a) above.
(1E) In subsection (1D)(a) above "excluded operations" means underground mining operations for the purpose of the working and getting of coal, or of coal and other minerals worked with coal, or for the purpose of getting any product from coal in the course of working and getting coal.'.

No. 189, in page 77, line 29, at end add—
'(2) The following subsections shall be substituted for subsections (1) to (5) of section 8 of the Local Employment Act 1972 (derelict land):—
(1) Where it appears to the Secretary of State—

(a) that any land in a development area or intermediate area (in this section referred to as 'the relevant land')—

(i) is derelict, neglected or unsightly, or
(ii) is not derelict, neglected or unsightly, but is liable to become dere-

lict, neglected or unsightly by reason of actual or apprehended collapse of the surface as the result of the carrying out of underground mining operations which have ceased to be carried out and which were not excluded operations; and
(b) that steps should be taken for the purpose of enabling it to be brought into use, or of improving its appearance,
he may, with the consent of the Treasury, make to the council of the county or district in which it is situated such grants as are mentioned in subsection (1A) below.
(1A) The grants that may be made under subsection (1) above are grants—

(a) towards the cost of the exercise of any power of the council to acquire the relevant land or any other land which is reasonably required for the purpose of enabling the relevant land to be brought into use, or of improving its appearance;
(b) towards the cost of the carrying out by the council, for the purpose of enabling the relevant land to be brought into use or of improving its appearance, of any work on that land or any other land; and
(c) towards the cost of carrying out a survey of the relevant land, with the approval of the Secretary of State, for the purpose of determining whether any works for the purpose of enabling the relevant land to be brought into use or of improving its appearance should be undertaken (whether or not such works are carried out).
(1B) Grants under this section may be made in such manner as appears to the Secretary of State to be requisite.
(3) The following subsection shall be inserted after subsection (7) of that section:—
(8) In this section—"exclude operations" means underground mining operations for the purpose of the working and getting of coal, or of coal and other minerals worked with coal, or for the purpose of getting any product from coal in the course of working and getting coal; and "land" includes land covered with water.".'.—[Mr. Fox.]

Further consideration of the Bill adjourned.—[Mr. MacGregor.]

Bill, as amended (in the Standing Committee), to be further considered this day.

NORTHERN IRELAND (ROADS)

The Under-Secretary of State for Northern Ireland (Mr. Philip Goodhart): I beg to move,
That the draft Roads (Northern Ireland) Order 1980, which was laid before this House on 25 June, be approved.
The House will have noted that this order is described as consolidating and amending the existing law relating to roads in Northern Ireland. At the present time, provisions relating to roads are to be found in dozens of enactments, some dating from the time of King William IV, including the Grand Jury (Ireland) Act 1836 up to the Roads and Road Traffic (Northern Ireland) Order, which became law in the summer of 1978. This body of law deals with matters ranging from the obsolete offence of skinning animals on the roadside to specifying the classes of traffic allowed to use motorways. Some provisions are no longer relevant to today's world and some are expressed in terms which are obscure.
Over the years there has been an increasing need not only for consolidation in more modern terminology of all those scattered provisions but for clarification of the law. This opportunity is also being taken to introduce certain new provisions, to which I shall refer later. The order should help hon. Members, as well as members of the legal profession and the public, to ascertain what the law is on matters relating to roads in the Province. The provisions are drafted as succintly as possible and are contained in only 65 articles and nine schedules. The fact that there is only one road authority in Northern Ireland has made the order less complicated, in that there needs to be no reference to the relationship between different road authorities.
Turning to the order, I should like to mention briefly the most significant of the new and amended provisions. Article 11 provides for all road bridges over operational railway lines to become the responsibility of the Department of the Environment for Northern Ireland. This is already the case with bridges carrying motorways and trunk roads over railway lines, so this is a logical extension of those principles. This division of responsibility is also in accord with an EEC

regulation that railways should not be left to bear all the costs of road over-bridges.
In article 25 the Department is given more direct and clearer powers to scour, to clean and to keep open drains situated in land beside roads. Where roads or traffic on them would be endangered or prejudiced by flooding, it is justifiable that the Department, as the road authority, should be able to take prompt and effective action. If land is damaged in the execution of these works compensation can be paid. All these powers bring the law into line with that in Great Britain.
Article 27 provides that dangerous ditches adjoining roads may be filled in or piped, depending on whether or not they are needed for drainage purposes.
Article 41 introduces provisions which are already law in Great Britain and which allow an existing potentially dangerous private access to be stopped up, either by agreement or by order made after opportunity of objection and hearing have been given. An order would not be made unless access to the land was not reasonably required or an alternative and reasonably convenient means of access was available or could be provided by the Department. This article provides for compensation and makes it an offence for a person to use an access which has been stopped up by order.
Article 42 re-enacts the law as it affects work carried out on or within certain distances of a road. This is necessary for the protection of the structure of the road and the safety of its users. The article is based on existing law but is more simple.
Control over the erection of structures outside the boundaries of roads would no longer be exercised under roads law but would still be a matter for planning control. There would no longer be any need for a person to obtain consent under roads as well as planning law.
In paragraph (1)(c) only a small part of the existing Roads Act access control is retained in relation to certain simpler types of access to agricultural land. These consist of accesses from fields to classified roads and also accesses to classified roads required in connection with development on agricultural land—that is, development


which is classed as being permitted development under planning law.
As part of the simpler arrangements, specific consent or permission to open certain accesses to unclassified roads will no longer be needed provided that reasonable safety requirements are met. These concessions and requirements are set out in amendments to planning rules, which it is proposed to bring into force simultaneously with this order. But, even where the opening of access is free of control under roads and planning law, any work within the boundaries of a road will still need consent. Paragraph (2)(a) of article 42 makes it clear that where planning permission has been granted for an access it will not be an offence under this article to carry out any work associated with its construction—for example, the alteration of a drain or fence, or the surfacing of a verge. Those works would, of course, form part of the application for planning permission.
Paragraph (8) specifies additional types of planning application which may be treated as major planning applications—that is, after the hearing of an appeal, the Planning Appeals Commission would report its findings to the Department for a final decision. This would apply to accesses or developments alongside trunk roads and motorways.
I turn now to article 48, which deals with a variety of offences of causing danger or obstruction or annoyance to road users. This article restates in modern terms some of the offences which exist at present in section 10 of the Summary Jurisdiction (Ireland) Act 1851. The more obscure offences have been omitted. For example, it is no longer illegal to skin beasts, to fly kites or to winnow corn on a road. The offence of playing games on a road to the danger of road users has, at the instance of the Royal Ulster Constabulary, been incorporated in paragraph (6). Paragraph (2) is aimed at those who make unreasonable use of roads and road verges for camping or selling goods.
Hon. Members may have seen that the wording of paragraph (2) has been expanded for clarity of meaning and that a new paragraph (3) has been inserted to ensure that delivery men who are exempt from prosecution under the Street Trading Regulation Act (Northern Ire-

land) 1929—for example, milk roundsmen—are also exempt from this article.
In paragraph (7) of the article is the re-enactment of the offences of turning animals loose on to a road and of causing injury or damage by the reckless driving of animals on a road. While paragraph (8) revises the offence committed by a person when his animal is found wandering on a road, paragraph (9) responds to representations which were made for a form of defence for the person who can show that he took all reasonable care to prevent his animal from wandering.
In article 50(1) a new offence is created of allowing material to fall from any part of a vehicle on to a road so as to cause danger or substantial inconvenience to road users. This provision refers, for example, to the mud which drops off the wheels or underbodies of vehicles leaving construction sites or muddy fields. It is quite often apparent that drivers leave trails of mud along roads regardless of the danger which could be caused to traffic, especially at night, or in wet weather. It is already an offence to load a vehicle in such a way that if the load should fall off it would cause danger or nuisance, and the new provisions in this article—which have the approval of the police—will strengthen the law and should help keep roads clearer of these hazards.
Article 51 lays down the framework for control over the siting and marking of builders' skips on roads. Hon. Members may note that paragraph (3) authorises the making of regulations specifying positions and circumstances in which a skip should not be placed without the specific consent of the Department.
I should perhaps explain that when control over builders' skips was first introduced for Northern Ireland two years ago it was believed that regulations could be framed which would give sufficient control in the interests of road safety, and that it would not be necessary to introduce the Great Britain system where permission is needed for each skip placed on a road. However, the difficulties in drafting such regulations have led to the amended provisions in paragraph (3), the effect of which is that while regulations could forbid generally the siting of a skip in places where a vehicle may not lawfully wait—for instance on yellow lines—the Department would be


enabled to give consent to the skip being sited in a safe part of the road.
Articles 55 and 56 set out in some detail powers needed by the Department to enter land which it does not own, and to carry out works in order to perform its functions as road authority. The articles also spell out the procedures to be followed if agreement is not reached with the owner or occupier of the land, and provide for reinstatement of land and for compensation in case of damage. The provisions of article 55 equate with the powers which the Department already has for the exercise of its other functions under several enactments, and Article 56 re-enacts existing powers, duties and offence provisions.
Hon. Members will, I am sure, have noted the new provisions in article 60, which require the Department to consult each district council at least once a year about the way in which the Department proposes to exercise its functions under this order in the area of the council. In fact, this form of consultation has been the practice since 1973, when road authority functions were centralised. Paragraph (2) of article 60 requires the Department to pay due regard to any representation made by a council. The requirements of this article are identical with those already placed on the Department in connection with its functions as water and sewerage authority for the Province, and they accord with the legal status of the Department as the sole authority for public roads in Northern Ireland. The order is based on that existing status, but does not, of course, prejudice any decision for the future administration of roads functions. Indeed, the consolidation of roads law into this one enactment would not hinder any future amendment of the law that might he needed.
The schedules contain the various procedures, amendments and repeals made necessary by this order. For example, the procedure to be followed by the Department for the compulsory acquisition of land is set out in schedule 5 and is based on the procedure which is used for vesting land for local government purposes. All penalties in the order have been the subject of special examination in the light of the gravity of each offence, and of the equivalent penalties in Great Britain.

In appropriate cases the maximum penalties have been increased to realistic levels.
I commend the order to the House. I am sure that it will be welcomed as a convenient, comprehensive and clear statement of the law on public roads in Northern Ireland.

Mr. Tom Pendry: Over the past few hours many references have been made to the lateness of the hour, but most of the hon. Members who made them are probably now asleep or on their way home. Northern Ireland Members of Parliament, Ministers, and party spokesmen for Northern Ireland are used to discussing important issues in the wee small hours of the morning. This morning is rather more special than most because many of us later this morning have to be in the Northern Ireland Committee to discuss the Fair Employment Agency's report and then to attend a major debate on the Government's proposals for constitutional reform in Northern Ireland. I shall be exceptionally brief, because I believe that on issues of this sort the first-hand experience of the Northern Ireland representatives is invaluable.
On behalf of the Opposition, I welcome the order in general. As the Minister said, it is a consolidation order. He made out a good case for it. However, I doubt whether the effects of articles 11, 25, 41, 42 and 43 will be as insignificant in cost as the Minister appears to think. I should be surprised if the net effect of the streamlining operation would not involve additional expense. We shall have to wait and see. It seems to be a sensible order, and we shall support it.
I shall restrict myself to one comment, and perhaps the Minister, when he replies, will give his view on it. I refer to the general application of article 60 dealing with the question of consultation with district councils. Is he satisfied that a minimum of one meeting is sufficient requirement for consultation with district councils with respect to the proposals of the Department to exercise its functions under the order? I believe that I am right in saying that the same provision applies to the water and sewerage industries, but the consultation is considered inadequate. If it is inadequate, it should be spelt out in the order that one meeting


is not enough. District councils would feel closer to the Department if it were clearly laid down that there would be more occasions when consultation could take place.
That is the only issue that I want to put to the Minister. This order is probably as much ours as his, and, therefore, it is very sensible. I believe that the hon. Gentleman has listened carefully to and taken note of the representations that have been made to him by Northern Ireland Members. The order is better for that, and I support it.

Rev. Ian Paisley: I agree in large measure with what the hon. Member for Stalybridge and Hyde (Mr. Pendry) said about Northern Ireland Members, Ministers and Shadow Ministers being used to having debates in the small hours of the morning. Bearing in mind that Scottish Members still have some business to do and that other hon. Members were here in the small hours of the morning, we do not feel so bad about it because others have had to bear the burden and heat, if there has been any burden and heat, in the small hours. As the hon. Member for Stalybridge and Hyde said, this will be a long and important day for Northern Ireland Members, so we cannot gripe too much about what is happening.
This is a hefty order of 64 articles and eight schedules. It contains 28 amendments and 38 repeals of various Acts. Therefore, it will need some digesting. It is to be regretted that we have to deal with it at this hour and do not have time to develop some of the points set forth in it. I fear that if the order is not implemented with generosity, it could be arbitrary and attract much opposition in Northern Ireland, especially in the rural districts.
I should like elucidation on some points to which I shall draw the Minister's attention. Some of them seem to be most difficult. First, article 11 provides:
This Article applies to every bridge which carries a road over a railway line".
What happened about bridges over disused railway lines? Were they transferred to the railway holding company, or have they been kept heretofore in the possession of the Northern Ireland Trans-

port Holding Company? Were they ever transferred? Whose responsibility were they? I should like to know what has happened about those bridges.
Article 25—"Drainage of roads"—is quite lengthy and deals with surface water. This is an important matter for farmers. I have made strong representations to the Minister about surface water on the road at the Craigs, Ballymena, where the Department opened a cut at the side of the read. I notice in paragraph (7) that a
'drain' includes any ditch, cut, culvert, soak-away dyke or sluice.
The Department cut a dyke and allowed the surface water to go into a farmer's property. That farmer now has a third of a large field continually under water. I have had the Department's officials out and they have said to the farmer "It is too bad, but there is no way in which we can do anything about it." They warned him that he was not to close the cut.
I should like the Minister to expand on that matter and to tell us the position of the owner-occupier of the land. Is there any remedy? As officials have told me in the company of the owner of the land, there is no remedy and the Department is entitled to take the surface water and allow it to flow into the farmer's land. He has been told that he cannot block up the cut. If I were that farmer, I would block up the cut. I would not allow my farm to be flooded. I should like the Minister to say whether this order will help that farmer, or whether it will give more strength to his Department to make these cuts in the road to remove surface water.
I do not understand article 42(1)(c). It provides:
Any person who without the consent of the Department…constructs any means of access to a classified road from agricultural land…where the construction of that access would be permitted by a development order;
What is at present permitted will become an offence and people will be
liable on summary conviction to a fine not exceeding £200.
I should like the Minister to expound on that. His elucidations so far have not helped me. Perhaps he will make another attempt to tell us exactly what this means. Does it mean that what a farmer can do today he will not be able to do tomorrow, when this order becomes law?


Members of the farming community need access to and from their land at various times. How does this part of article 42 relate to the farming community, and has it been discussed with the farming community?
Regarding consultation with district councils, article 60(1) states that the Department shall consult
where it appears necessary or desirable to do so and in any case at least once in each year.
That is a mild burden on the Department. The Department may not think it desirable to consult the district council. Why should it be left so open? The article should state that the Department "must" consult at least once in each year. The Department can say that consultation is not desirable, and that it does not need to consult the local authority or the district council.
I realise that article 60(2) states that
A district council may make representations to the Department.
But how will it know what the Department will do? Who will tell it that the Department will take action under this order?
Schedule 2 contains wider powers. It states that:
Notice under Article 30 may be served—
(a) upon the owner or occupier of the land directing him—
(i) to remove any building or structure whether permanent or temporary, the removal of which is in the opinion of the Department expedient for the prevention of any such danger as is mentioned in that Article;
Many buildings in Northern Ireland are close to rural roads and certainly obstruct the view of traffic along those roads. This schedule is written so widely that as a result notices could be served on the owner or occupier of the land directing him to remove structures or buildings. It would need to be used very carefully, because there are, especially in the rural districts, many buildings and homesteads that are right next to the road. I can think of half a dozen roads in my area where the roadway almost runs into the gable end of some homes. I see a nod from the Under-Secretary, the hon. Member for Pudsey (Mr. Shaw), for he has been along some of these roads. This matter needs to be taken on board. I should like an assurance from the Min-

ister that the order will on no occasion be used against a place of residence.
I do not like the Lands Tribunal because it is one of those courts from which there is no appeal. Secondly, it is a court in which, if one does not win, one pays all. Under the regulations that the Minister has in mind, will those who have to go to the Lands Tribunal because they are not satisfied about compensation be subject to the old rule that if they do not win their case they have to pay the costs of the Department and their own costs? What exactly does the Minister have in mind as regards that matter?
Turning back to page 26, I wonder why the person who is in charge of a vehicle and allows a
quantity of mud, clay, lime, farmyard manure, or other material from the vehicle
to drop on the road is liable on summary conviction to a fine not exceeding £200, when a person who has land and who
wilfully or recklessly allows any filth, dirt, lime or other offensive matter to run or flow on to a road
can be fined only up to £50. I should have thought that both offences were parallel. I wonder why there is that change.
The Minister pointed out that under article 51, paragraph 2, regulations would be made. I take it that, because this is a Northern Ireland order based on a Northern Ireland Act, these regulations would not be subject to any approval in this House. I should like the Minister to enlarge upon that. Does that mean that, because the order is made under the Northern Ireland Act 1974, there will be no possibility of discussing the regulations or in any way having representations made on the Floor of this House or through Parliament to deal with them?
The Minister has done very well to deal with the matter of skips on the road, because I believe that they have constituted a danger to the general public. I hope that the fact that games that are dangerous are to be banned from the roadways does not mean that youngsters who have no other place to play cannot have an occasional game of football on certain roads. I hope that it will not be strictly interpreted by the Royal Ulster Constabulary because I think that a person who wants to kick a ball is as much entitled


to do that as a person who wants to fly a kite. What is sauce for the goose is sauce for the gander. I hope that the Minister will intimate to the authorities that, although this power is written into the order, in certain circumstances football would not be reckoned to be a dangerous game, any more than it would be dangerous to fly a kite in certain areas. Politicians, and especially the present Government, are flying many kites at present.
However, I am thankful that there is a consolidation measure before the House. It was needed. There are many things in the order which are helpful. But the matters that I have raised need to be elucidated. I trust that the Minister can meet us pretty fair on these issues.

Mr. Wm. Ross: I should like to reiterate the remarks already made about the lateness of the hour. At least we are up early this morning. I thank the Minister for the meeting that we had on 5 March, which was both long and helpful. For two hours we severely tried his patience and that of his civil servants. However when he considers the changes that resulted from that meeting, he will agree that it was worthwhile. There is a long list of changes. Many are minor, but some are major. Some are simply drafting alterations. I was also happy with the assurances that we were given on that occasion, and with the explanations of several aspects of the order.
I note that the fines have been revamped. As the Minister said, there has been a "rethink". Most fines went up. However, according to article 48, two of the fines have been reduced from £100 to £50. I am curious to know why. Are they the only two fines to be halved? If so, why? A reduction is unusual at a time of inflation.
The Minister was very helpful, but he failed to meet many of our points. I welcome the removal of the six-month limit on compensation for damage to agricultural land caused by the Department, or its servants. We are greatly concerned, because there is enormous friction between landowners and those who work for the road service about how water has got into a field. They dispute

whether the little gap in the hedge has always been there, or whether it is a new one. They argue about who made it and how it occurred. Sometimes one begins to think that the Lord has created the gaps. Somebody digs them, and there is usually a row when the farmer finds his field full of water. Such an intrusion of water can continue for a long time before it comes to the notice of the landowner. The removal of the six-month bar is a great help. Given that change, the Minister should tell us whether the removal of the six-month period runs from the date on which the order comes into force. Perhaps he will clarify whether individuals can seek compensation under the existing conditions. That is important to landowners.
Articles 26 and 27 deal with drainage from roads. Most of the provisions appear fair and reasonable. However, public relations are important. If someone talks to the landowner reasonably, much of the friction can be avoided. Could one not whisper a word in the ears of engineers and suggest that someone should talk to landowners before they embark on drainage schemes? We might then achieve a reasonable and a friction-free result.
Article 29 covers the removal of fallen structures. I hope that due discretion will be exercised after a bad storm. An enormous number of trees fall across roads. I hope that due discretion will be shown in chopping up and removing such trees. Those of us who have seen such things happen—and fortunately it has never happened to me—know the result. The tree, which is usually an excellent piece of timber, has fallen across the road and the workmen come along to clear it. They simply saw it off at the hedge on both sides of the road, when a little forethought would have told them that it would be much easier to saw it off at ground level and lift the whole think back. At least then something would have been salvaged, and the tree would not end up as nothing more nor less than firewood.
Article 31 provides that if the Department is of the opinion that a building wall or structure is in such condition as to be dangerous to road users, the Department would serve a notice on the owner or occupier requiring him to carry out repair works or to remove or enclose the


structure. The real problem here lies in article 31(b), which provides
that there is in or on any land adjoining a road an unfenced or inadequately fenced source of danger to persons using the road.
May we be told what sort of fencing is considered adequate? I think particularly of roads which run through bogs, many of them raised a considerable height above the level of the surrounding countryside, and some of them unfenced or poorly fenced. If a car runs off the road, or if a pedestrian or cyclist falls off it and is seriously injured, who will be held responsible?
The Minister must have some idea what constitutes adequate fencing if his Department is to have the power to serve a notice on the owner or occupier requiring him to carry out fencing to required standards. Is the sort of standard that is being aimed at that laid down by the Department of Agriculture? That appears to be more than reasonable; indeed in many cases it would be unreasonable to ask for that level of fencing.
Article 41(3), to which the Minister drew attention, says that the Department may agree with the occupiers that they may provide a new means of access to the land. I have never liked this word "may" in legislation, especially if carrying out the "may" means that it will cost the Department money. I wonder why the word is not "shall". Then the owners would have proper redress against the stopping up of an access.
In article 42, which deals with the restriction of building, and the alteration of fences and so on, we come to a very difficult and important area for those people who live in houses built close to the road, and with buildings close to roads. This lays down careful instructions about the distance one must keep from the centre of various classes of road. But it does not say what the position is whenever an individual decides to reconstruct or build on an existing site. What is the position? When the individual finds that he has a building that has deteriorated to such an extent that it must be replaced, does he find himself blocked from rebuilding on the same site by virtue of this provision? That is what it appears to mean.
Under paragraph (2) a person can carry out lawful repair work, but there is no

provision for replacing that which is falling down. The Minister should clear up that matter. The paragraph covers walls around gardens or farmyards and, in extreme cases, the fencing of farmland, although that is also covered elsewhere in the order.
Article 48 is in some ways the most important article. Fines are reduced rather than raised. Paragraph (2) deals with people selling goods along a road. That is a common practice, which appears to be growing. Potatoes, tomatoes strawberries and apples can be bought at the roadside. In County Armagh there are fixed stalls outside farmhouses where apples are sold for a large part of the year. What is the position of people who have such stalls? What is the position of the individual selling his apples or strawberries by the side of a public road? What is the position of the chap who parks his fish and chip van in a lay-by or on the side of a main road in order to start selling? Will these people be moved on, or will there be a loophole?
The most important aspect of the matter relates to campers, most of whom are gypsies. They can stay in an area for many months, and create an enormous amount of filth, debris and noise. They cause considerable annoyance to local residents. What is their position? How is "road" defined? How wide is a road? Does the definition also include grass verges, some of which are very wide? Can the people encamped be moved on? How long will it take to bring such campers to court? We have lived with the problem for many years. Is the law strong enough to deal with these people?
Paragraph (6) reads:
Any person who plays a game on a road to the danger of a user of the road shall be guilty of an offence".
In the original proposal the word was "annoyance" and not "danger". I can see reasons for changing the word, but there are occasions when annoyance could be caused with no resulting danger. Would it not have been preferable to use both words, which would have covered the range of possibilities? Ball games in towns can cause annoyance. It is all very well to say that no one wants to stop children kicking a ball around, but in Housing Executive estates in Northern Ireland there are continual problems of children playing with footballs, which


causes trouble, particularly for the elderly. Almost every housing estate is full of signs nailed on walls saying "No ball games". By changing the word to "danger", are we preventing the Housing Executive from posting such notices? If that is so, many of my constituents will regard that as a retrograde step.
I welcome the defence for farmers whose animals stray or are maliciously let out. That is essential and I am glad that it has been written into the order. A problem arises over who is to determine what are "reasonable precautions". Would a lock on a gate qualify? Would a farmer who kept his gates shut be safe? I advise stockholders that they should insure against damage that may be caused.
The definition of "animal" is given with great precision in article 48. Does the Minister consider that to be wise? Animal means
any horse (including pony, ass, and mule), cattle, sheep, goat or swine".
It does not include poultry, dogs or cats. Anyone who has had a hen fly across the front of his windscreen, as happened to me, knows that that is a source of danger. What would be the position of someone who had an accident in such circumstances? I may be nit picking, but the matter could have been dealt with by a reference to "any animal" rather than by specifying individual animals.
Article 53 deals with the problem of acquiring land. Land can not only be acquired, but can be acquired within 200 metres of the middle of a road. That covers a large area of Northern Ireland. There are many roads within 400 metres of each other.
The Minister may dispose of any land so acquired. Recently land that was acquired by the Ministry of Defence was given outline planning permission, following an application by the Department of the Environment, and was sold by public auction. If that land had not had outline planning permission, it would have had to be offered to the original owner. May we have an assurance from the Minister that the Crichel Down example will not be evaded by outline planning permission being sought for any land that he may take under his control? If that device is to be used, the Minister will bring a nest of hornets about his ears.
On articles 55 and 56, I welcome the Minister's assurances that his officials will behave in a responsible and reasonable manner. May I make a plea that whenever new roads are being constructed, great care is taken to inform landowners of exactly what is to happen? Every hon. Member who has had to deal with the aftermath of a new road will know what I mean. If more care had been taken in public relations in the early stages of major repairs or the construction of bypasses, half of the problems would not have occurred.
The hon. Member for Antrim, North (Rev. Ian Paisley) said that article 42(1)(c) did not make sense. It seems to me that the word "not" has been left out.
Due regard must be paid to consultations. I served on a local council. The word "consult" is scattered all over local government legislation in Northern Ireland. It appears in nearly all interfaces. My experience tells me that either there should be no duty to consult or that the local authorities should be left in control. They should not be left hanging in midair. Responsibility should rest with the Minister. If it is left with councils which do not have the responsibility, an irresponsible attitude will be created because at the end of the day they are not able to take a final decision. Officials will be placed in an impossible position. The Minister should either wipe out the consultations or give councils real powers.
This is a valuable order. If common sense prevails, it will do much good.

Mr. Peter Robinson: At 3.56 am I am supposed to make a valuable contribution to a debate on roads. No hon. Member is at his best at this time of the morning, especially since at 10.30 am we are expected to be in Committee.
Many parts of the measure are welcome. We thank the Minister for taking us on a trip down the Northern Ireland roads legislation memory lane. We are pleased that the kite flyers will be able to fly their kites high.
I am a member of a district council. I welcome the extension for consultation. My council of Castlereagh received a circular dated 12 October 1979 asking for comments on the legislation before


30 November. Anyone who knows how councils operate will know that by the time such a circular goes to committee and comes back to council, the period for consultation is over. I hope that the Minister's right hon. and hon. Friends will take note that he is prepared to extend the period for consultation and that they will provide more time for consultation on other subjects.
I take a different view from some hon. Members about article 60. We have a good relationship with the roads division in our area. It comes to us three times a year. What does the Minister consider to be "due regard" to a district council's views? Invariably it is a case of merely listening to a view and doing what was intended anyway. The consultation period provides an opportunity for councillors to get their views off their chest and to tell their voters that they have done something. That is as far as it goes. I have to follow what was said by the hon. Member for Londonderry (Mr. Ross), namely, that teeth should be given to councils where roads are concerned. Consultation is not enough.
Will the Minister clarify a point in relation to article 60? As he knows, councils already have visits from the divisional roads manager on a regular basis. Is the Minister now saying that there will be a further period of consultation at least once a year on this specific piece of legislation? Or is that expected to be contained within the general comments the divisional roads manager makes on his rounds of the district councils?
The question of to whom a thing is necessary or desirable arises. It is always necessary or desirable to the Department, and sometimes when district councils wish to comment we find that people are not so willing to listen. Perhaps the Miniser will take on board the question of consultation and inform us what he believes is the due regard to be paid to the views of councils.
Moving on to article 41, perhaps the Minister can tell us about the stopping-up of private accesses. We note under that article that
Where the Department considers that the use of a private means of access from a road to any land is likely to cause danger to, or to interfere unreasonably with traffic on the

road, the Department may make an order providing for—
(a) the stopping-up of the access to the land."

Although the measure is qualified in some respects in that it says
No order shall be made…unless the Department is satisfied
as to various aspects, there does not appear to be any appeal against the decision of the Department. It seems that the Department can consider the matter alone. I would have thought that farmers in particular, who might be most affected by this legislation, would think it unlikely that the Department could in any reasonable way act as both advocate and judge in the matter. I imagine that if the Department was the directing body it could hardly be relied upon to give an independent judgment on the matter. Can the Minister say whether the arbitration section in the order has any bearing on that issue, or what appeal is open to aggrieved persons?
Will the Minister also give some guidance on snow clearance? I think that all hon. Members will encounter many problems during the winter period. I had 22 cases brought to my notice of people seeking to sue the Deparment after accidents during the last spell of snow. I notice that the provision deals specifically with obstruction and, again, exclusively on the roads. Does the provision have any bearing on obstructions on footpaths?
I note that the Department has written to at least some of the district councils about the availability of labour when there is packed snow and the roads have to be cleared. Obviously, district council works staff cannot be employed on other matters, and they are available. But there is a legal problem about council staff working on the clearing of footpaths should one of them sustain an accident. If that happened, the likely conclusion is that the person would have the right to sue the council and not the Department.
If the Minister is seeking co-operation from the councils on normal snow clearance and clearing obstructions perhaps he can clarify the position and say whether the council can help the Department in any other way such as by hiring staff to the Department. This is a matter of great concern because the Department at


present clears some of the main arteries and leaves all the estates and side roads completely blocked. That matter certainly needs attention.
What will be the likely effect of the order on the finances of the Department? Many road construction firms in Northern Ireland are laying off men because of the severe cuts in the budget. I understand that the cuts amount to between 10 per cent. and 18 per cent. in some areas. These are having a devastating effect on employment in the road construction and repair section.

Mr. Goodhart: I am grateful for the help that I have received from certain hon. Members from Northern Ireland in the preparation of the order. I am also grateful for the contributions that hon. Members have made this morning.
The hon. Member for Belfast, East (Mr. Robinson) ended where the hon. Member for Stalybridge and Hyde (Mr. Pendry) began—namely, by asking whether the order will increase costs for the Department of the Environment. I have been anxious on that score. I am assured that the extra cost to the budget of the Department of the Environment will be negligible, although in certain instances rights to compensation are increased and improved. I am told, however, that there should be no need for any extra staff.
The hon. Member for Stalybridge and Hyde and all those who took part in the debate referred to article 60 and the degree of consultation that will be necessary between officers of the road service and the district councils. That will increase the amount of consultation that is required. It will increase by at least one the number of required consultations with a district council. I am sure that all hon. Members will hope that consultation between officers of my Department and the district councils will go far beyond the minimum levels that are laid down in the order. It is my intention to improve consultation throughout the Province notwithstanding that it is close and good in many areas.
The hon. Member for Belfast, East invites me to discuss the philosophical question of what good consultation means. I do not think that I can

reasonably do that at this hour. However, we know satisfactory consultation when it is achieved and we know when it is not achieved. Hon. Members and the district councils concerned are quick to let me know whether there is room for improvement.
The hon. Member for Antrim, North (Rev. Ian Paisley) raised many detailed points. Because of the lateness of the hour and the fact that we have more business ahead of us, I shall write to him on a number of those detailed points. I can assure him that, when it comes to the subject of drains, which issue he raised under article 25, this order increases the responsibility for paying compensation to landowners rather than the reverse. I do not want to argue now about the true meaning of article 42(1)(c) which, if we had the time, could be argued over for an hour and still be obscure.
The hon. Members for Londonderry (Mr. Ross) and for Antrim, North were concerned about the playing of games in the road. This is a question which has exercised me in the preparation of this order. The old rules laid down that
Any person who plays any game or flies a kite or makes or uses a slide of snow or ice on a road to the annoyance of a user of the road shall be guilty of an offence.
That seems to be absurdly restrictive and I believe that the balance we have struck is infinitely better.
The hon. Member for Antrim, North was rightly worried about schedule 2 and the powers in it. They are wide powers. They re-enact section 19 of the Roads Act (Northern Ireland) 1948. In so far as there is a change in this order it does allow the Department to pay for the works required and there is, therefore, a substantial improvement. The hon. Member for Londonderry was anxious about the acquisition of drains and the need for officers to be tactful. This is an issue which he has raised in the past and will no doubt raise again. I wholly agree with him, and accept that common sense should be used when dealing with the question of removing fallen trees and structures that have collapsed.
When it comes to the question of what is adequate with regard to fencing, I would not, at this hour, wish to enter into what must be a rather involved question, although the hon. Member may like to know that there has been some anxious


discussion in the Department of the Environment about golf courses and the question of fencing to curb those golfers who habitually hook or slice their tee shots. I accept, with the hon. Members for Londonderry and Belfast, East, that article 41, dealing with compulsory stopping-up of accesses, is important and reflects a substantial extension of ours. I can merely say at this moment that we intend to use this power sparingly and that, where it is not possible to get agreement, I will ensure that all cases are referred to the headquarters of the Department and that they reach the Minister's desk.
With those answers to some of the more general points, I commend the order to the House.

Question put and agreed to.

Resolved,
That the draft Roads (Northern Ireland) Order 1980, which was laid before this House on 25 June, be approved.

NORTHERN IRELAND (STREETS)

The Under-Secretary of State for Northern Ireland (Mr. Philip Goodhart): I beg to move,
That the draft Private Streets (Northern Ireland) Order 1980, which was laid before this House on 25 June, be approved.
The House will have noted that this draft order is very largely a consolidation of existing legislation. That legislation is the Private Streets Act (Northern Ireland) 1964 and the amendments made to it, particularly in 1973 when the functions of town and country planning, road authority and private street matters were transferred to the former Ministry of Development.
The Private Streets Act 1964 made a considerable advance on earlier legislation in bringing a number of matters into one compact code. These matters were the control under planning law of the layout of new streets; the requirements that those streets must be constructed to specific standards; and that their making up by developers must be guaranteed by their lodging adequate security with the responsible authority. The Act also contains procedures governing the making up and adoption of existing private streets.
Prior to 1964 there had been considerable public outcry about unfinished streets, particularly in new housing developments, and the Act has served its purpose well by reducing the number of cases where serious complaint nowadays arises that a street has not been provided or finished in a reasonable time.
The draft order now before the House is necessarily a complex measure. Part II of the order deals with the layout of new streets in planning terms and with the detailed way in which they are to be constructed. Part III deals with the adoption of streets into the public road system. Part IV sets out the procedures for departmental action either if there is default in new development or if older streets are needed to be made up to standard. Part V ensures that, before new buildings are begun, there is a legally binding assurance that the streets will be provided. All these provisions follow the long-established principle that streets to be adopted into the public road system are provided at the expense of the developer or, in older streets, the frontagers.


At the same time, an opportunity of appeal is provided at various stages.
In the main, therefore, the order is a re-enactment of existing law which has become difficult to read and understand because of the many amendments which have been made to it. The opportunity is, however, being taken to re-word a few provisions for the sake of clarity, and to include some other amendments dealing with detailed points.

Mr. Tom Pendry: This is a consolidation order which also began its life under the previous Administration. It is basically sound, and we shall support it.
Will the Minister expand somewhat on the implications of article 15(1), the recovery of expenses by the Department? How do the Government intend to monitor the recovery of the expenses? Does the Minister foresee any particular difficulties? Does he, for instance, expect there to be an increase in the Department's staff arising from the recovery of these expenses?
Secondly, would the Minister care to elaborate on the instalment mechanism contained in article 20? Does he foresee a need for extra personnel? I know that I appear to be preoccupied tonight with the problems of increasing personnel. That is not because I believe that they ought not to be increased. That would be surprising as I am a Member sponsored by the National Union of Public Employees. But we are rather fond of the Minister and would hate to see him do a U-turn without anyone noticing.
Having made those points, I wish only to add that we support the order.

Mr Deputy Speaker (Mr. Richard Crawshaw): The discussion is limited to the desirability of consolidation and to any amendments which are new to the legislation. We may not have a general discussion on the Bill.

Rev. Ian Paisley: I welcome the consolidation of these measures, but there is one point that I should like to put to the Minister. He mentioned that the consolidation arose largely out of the reorganisation of local government. As we are all aware, we

had various sections of responsibility divided and redivided. The Minister will know that there were council houses under the local authorities that were handed over to the Housing Executive. Some of these houses had back entrances to them, and as a result of the handing over there was a division of responsibility. The houses went to the Housing Executive and the back of the houses went to the environment Ministry.
As a result of the reorganisation, controversy has arisen over the streets and over the application of some of the laws that we have now in the order. I call the Minister's attention to this and especially to the matter that I have already raised with his Deparment in regard to the Moat Road, Ballymena, where there is a dispute over who is responsible for streets that back on to these houses. As I read the order, I find many things in it that are helpful, and I trust that they will apply to these entrances.
There is another matter to which I draw the attention of the Minister, relating to bonds. When a contractor is to build houses he enters into a bond and a sum of money is guaranteed in the bank so that the streets that will be fronted by the houses will be completed. A large number of building contractors in Northern Ireland have been going bankrupt and not finishing the jobs. As a result, many of the streets need the benefit of the laws that we are enacting tonight. There is a lot of work to be done under the order, as the Minister knows.
Why cannot the Minister's Department now take the money that has been lodged for bonds and proceed immediately with the work necessary to bring the streets into line with what is set out in the order?

Mr. Wm. Ross: Like the hon. Member for Antrim, North (Rev. Ian Paisley), I shall be brief, because I am covering much the same ground.
The order consolidates and lays down the standards of construction of private streets. It is a matter that causes all of us who have private development on any sort of large scale a great deal of concern. We are continually confronted by complanning constituents, and my own experience is that officials seem to be extremely reluctant to carry out the enforcement procedure. One can very well understand that, but it is of small comfort to


the unfortunate people who have to live with the debris that is left behind.
Can we have an assurance from the Minister that whenever we have the problem which has already been touched on by the hon. Member for Antrim, North in regard to bonds—in some cases continuing bonds, perhaps a series of them, and perhaps more than one developer, with part of the land being sold—the Department will move in rather more quickly than in the past? Are we going about this in the wrong way? Should we be trying to deal with the problem from an entirely different angle to ensure that the streets are laid to a proper standard before the foundations are laid?

Mr. Goodhart: I am grateful for the kind reception the order has been accorded. I thank the hon. Member for Stalybridge and Hyde (Mr. Pendry) for his kind words. We do not believe that article 15 will lead to any problems. It is a re-enactment of section 15 of the Private Streets Act (Northern Ireland) 1964. It should not put any additional burden either on the staff of my Department or on the road service. I do not accept that the provision in article 20 for the payment of expenses by instalment, which duplicates section 20 of the 1964 Act, will increase the number of people who will want to pay by instalment, nor that it will lead to any extra burden on the staff.
I note the words of the hon. Members for Antrim, North (Rev. Ian Paisley) and for Londonderry (Mr. Ross) about the necessity for the Department of the Environment to move more quickly where there have been problems with developers defaulting on their requirements. Given the restrictions of which we are all aware, I cannot guarantee that my Department will be able to move more quickly than it has in the past. At least we should have a clearer idea of the rules governing the responsibilities of all concerned. From my experience in my constituency, I realise the immense problems that that causes for some front-agers and for developers. The order will not cure that problem, but it will make the rules clearer. In that sense, I commend it to the House.

Question put and agreed to.

Resolved,
That the draft Private Streets (Northern Ireland) Order 1980, which was laid before this House on 25 June, be approved.

LAW REFORM (MISCELLANEOUS PROVISIONS) (SCOTLAND) BILL [LORDS]

Order for Second reading read.

Motion made, and Question put forthwith pursuant to Standing Order No. 67 (Public Bills relating exclusively to Scotland),
That the Bill be committed to a Scottish Standing Committee.—[Mr. Wakeham.]

Question agreed to.

LAW REFORM (MISCELLANEOUS PROVISIONS) (SCOTLAND) [MONEY]

Queen's Recommendation having been signified—

Resolved.
That, for the purposes of any Act of the present Session to make new provision for Scotland as respects the law relating to the qualification of jurors, to amend the law relating to jury service in Scotland, to make further provision for Scotland in respect of prior rights in the estates of deceased persons, to enable amendments to be made to provisions of the Legal Aid (Scotland) Act 1967 relating to contributions from assisted persons, and to amend the provisions of the Prescription and Limitation (Scotland) Act 1973 relating to limitation of actions, it is expedient to authorise the payment out of moneys provided by Parliament of any increase in the sums payable out of the Legal Aid (Scotland) Fund, in so far as any such increase is attributable to provisions of the said Act of the present Session which enable—

(a) new amounts to be substituted for the amounts of disposable income and capital above which such contributions may be required; or
(b) courts to allow actions of damages in respect of personal injury to be brought outwith the time-limits generally applying.—[The Solicitor General for Scotland.]

BIRMETALS FACTORY, NORTHFIELD

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wakeham.]

Mr. Jocelyn Cadbury: I asked for the opportunity to debate the closure of the Birmetals


factory for three reasons. First, the closure will have a serious effect on the level of unemployment in my constituency. Some 600 employees of the company, who were dismissed last month, are still unable to claim unemployment benefit. Secondly, I hope to highlight the lessons that both management and unions can learn from what went wrong at Birmetals. Thirdly, I believe that the closure of this factory has certain implications for Government policy, and I should like to make some suggestions regarding the Government's industrial strategy.
I think that it would be helpful to my hon. Friend if I gave some of the background which led to the closure of this factory.
Birmetals is part of the Birmid Qualcast Group and until recently employed a total of 900 people in my constituency in the production of aluminium and magnesium alloy components. In recent years the market for aluminium products has been fiercely competitive. Imports of rolled aluminium into the United Kingdom have now reached 40 per cent., and the importing companies, based mainly in Germany and Belgium, have benefited from the appreciation of sterling. In fact, they obtained a 6 per cent. increase in earnings last year without having to negotiate any price rise with their United Kingdom customers. That meant that Birmetals was hardly able to raise its prices at all last year. At the same time the company suffered severe cost inflation. The combination of these two factors squeezed Birmetals in a nut cracker and led to trading losses in the years 1977–78 and 1978–79.
Despite these difficult circumstances, Birmetals planned to break even this year, but it was then that it was hit by the final body blow—a disastrous internal dispute.
In August last year the company negotiated a six-month wage deal worth 12½ per cent. with the understanding that it would talk to the unions again in January this year about a possible supplement. However, during the latter part of last year the economic climate deteriorated so rapidly that the company felt unable to agree to a further wage increase on top of the previous 12½ per cent. But the unions involved, of which the Transport and General Workers Union had the largest membership, insisted on a 20 per cent. increase, which would have meant

a cumulative total rise in wage rates of 32½ per cent.
Industrial action followed. The unions blacked about 20 key jobs and that soon brought the factory to a halt. During the subsequent two months the company was forced to lay off the majority of its work force and it accumulated losses of £600,000.
Management at that stage, both in its negotiations with the shop stewards and in letters to the work force, emphasised the disastrous effect that the dispute was having on its cash position. It was highly regrettable that the main union concerned—the TGWU—apparently did not take these warnings seriously and continued to urge the men to back sanctions.
At the end of May the company made a final effort to get the men back to normal working. This failed, and on 12 June the management dismissed those 600 employees on strike on the basis that they had broken their contracts. At the same time the company announced its decision to close the factory and to make most of the remaining employees redundant.
Having listened to both unions and management, I feel that it is unlikely that Birmetals will reconsider its decision to close the factory.
What has been lost by this closure? The damage has been twofold. First, the British-owned aluminium industry has lost one of its two remaining manufacturers. Therefore, the closure represents a serious strategic loss to our industrial base.
Secondly, up to 900 jobs have been lost at a time when the engineering industry in the West Midlands is in serious decline and unemployment in the Birmingham area has risen to 6 per cent. It will be difficult for these people to find new jobs.
I come now to the three specific issues that I want to highlight. The first is that for those employees who were dismissed while in dispute with the company, the consequences have been compounded by the fact that they have been unable to claim unemployment benefit and have received no redundancy payments.
I appreciate that this matter does not lie within the province of my hon. Friend, but I ask him to convey my concern to my right hon. Friends the Secretaries of


State for Social Services and for Employment. I learnt only a few hours ago that the regional insurance tribunal, which heard a test case today, has declared that the stoppage of work is still continuing, and therefore the 600 dismissed employees will still not be eligible for unemployment benefit. That is an absurd decision. How can a stoppage continue when the employees concerned have been dismissed, and when, in the eyes of the insurance tribunal, will the stoppage come to an end? This a serious matter for those 600 people, and a rational decision must be made in the near future.
My second main point concerns the lessons that both management and the unions in the Midlands and throughout the country can, and I hope will, learn from what happened at Birmetals. It is difficult and unwise for an outsider to try to apportion blame in an industrial dispute, but it should be made clear that despite all the problems that faced Birmetals, management had no intention of closing the factory until this dispute. It was determined to battle on. It was not the recession, the value of sterling or imports, that killed this factory, though they certainly weakened it. The immediate cause of closure was the industrial dispute.
If there is one major lesson to be learnt from this case, it is that industrial action, whether all-out strikes or blackings by a handful of men, destroys jobs. I am sure that this dispute could have been avoided. It seems incredible that the unions concerned could have taken a decision to bring the factory to a halt when they knew the critical financial position of the company. Management had warned the shop stewards and the men of the company's predicament, yet the unions, particularly the Transport and General Workers Union, chose to ignore the warnings. That was wholly irresponsible. It is vital that union negotiators, in the Midlands and nationally, take note of what happened to Birmetals when they start to bargain in the coming round of wage negotiations. Unions must take account of the commercial circumstances of each individual firm if further tragedies of this nature are to be avoided.
On the other hand, the company and the management could have begun their communications exercise earlier and

talked more directly to the employees. If senior management had spoken directly to the men on the shop floor, the message might have got through. From talks that I have had with ex-employees of the company, there seems to have been a widespread lack of understanding of the position by the work force.
The second lesson that can be learnt from this dispute is the need for British management to improve its communications with its work force and to build up confidence among its employees. Then, when the real crisis comes, the work force will be more likely to believe management and show restraint in negotiating wage levels.
I conclude by making certain suggestions to the Government in order to prevent further tragedies such as that at Birmetals. Again, I am aware that some of the suggestions involve Departments other than that of my hon. Friend. The Government must set a better example on public sector pay than they did in their first year of office. There is no doubt that high wage settlements in the public sector have made the task of managers in the private sector—in companies such as Birmetals—more difficult when arguing the case for wage restraint. I believe that the Government have a responsibility there which they must face up to in the coming year.
Secondly, I think that the Government could do more in their battle for wage restraint if they established some kind of independent pay forum. By that, I do not mean a pay board which would recommend norms, but I believe that it should be some sort of body which would point out to both sides of industry the effect on the level of unemployment of settling at different wage levels. In other words, it would point out to people the consequences of their own actions. I think that at present there is a lack of understanding by some union negotiators, and I think that the Government could do more to help in that respect by establishing such a pay forum.
Thirdly, there is the qustion of sterling, because there is no doubt that in the Birmetals case the fact that importers were given what amounted to an increase in their profits without any need to raise their prices had a serious effect on the British-based producers. Besides further reductions in the minimum lending rate,


I believe that the Government could take more positive action to reduce the value of sterling. They could do this by imposing controls to discourage capital inflows. This has been done by both the Germans and the Swiss. The latter have had some success in using a two-tier interest rate system, with a negative rate for foreigners depositing funds in Switzerland. That is something at which we in this country should look seriously.
Lastly, I believe that the Government should take action to improve industry's real rate of return, which is now down to a pathetic 2 per cent. The best form of relief for manufacturing industry would be either to reduce or to abolish the national insurance surcharge. This is a thoroughly bad tax imposed by the previous Labour Chancellor. It is simply one more financial burden on industry which is damaging to both employment and exports and which encourages imports.
In conclusion, I think that if the Government took up some of these suggestions the present harsh economic climate for manufacturing industry would to some extent be mitigated, and I think that we would see fewer tragedies such as the closure of Birmetals. I am a firm supporter of the Government's general objective of bringing inflation under control, but, while we must pursue that policy, it is essential that we do not inflict such damage on our manufacturing base that we are unable to take advanatage of the economic upturn when it comes.
The West Midlands is the engine room of this country. We must ensure that the powerhouse survives intact for the future.

The Under-Secretary of State for Industry (Mr. David Mitchell): I congratulate my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) on having secured this Adjournment debate and on his tenacity in remaining here until half-past four this morning in order to bring to the attention of the House the very serious effect on employment in his constituency, the loss of some 900 jobs, of the closure of the Birmetals factory.
My hon. Friend referred to the need to draw three lessons from what has happened. I believe that he is right to

do that, because here was a company which suffered a serious squeeze on its cash and was caught, as he put it, between the nutcracker of the high pound, high inflation and rising imports—a company weakened by these things but not killed by them—and killed by industrial action, killed by a dispute which dragged on, killed by a claim for a wage settlement which the business could not afford.
My hon. Friend rightly said that the first lesson to be learned was that 900 jobs were lost. They were lost not because of the external difficulties facing the company but because of its internal problems, as regards industrial action.
Secondly, my hon. Friend drew attention to my old trade union, the Transport and General Workers Union. I am surprised and disappointed that it did not recognise the consequence that would flow. A sad lesson can be learned that may save other firms, and save others from losing their jobs.
Thirdly, my hon. Friend drew attention to the management's possible failure to communicate. I was disconcerted to hear my hon. Friend say that things might have been different if the management had gone on to the shop floor. Given British management today, I would have thought that management would have been on the shop floor. If it was not on the shop floor, making its views known, it must carry part of the blame for any communications failure.
My hon. Friend pointed out that as the firm folded up while the dispute was in progress, those on strike at that time have lost any entitlement to unemployment benefit. This is not a matter for the Department of Industry. I shall draw it to the attention of my ministerial colleagues in the Department of Employment. My hon. Friend has highlighted a situation that may easily be repeated. Indeed, it will be repeated throughout the West Midlands and the country if the warning is not taken.
We face a tough year. We are now on the flood-tide of inflation. It was caused some 18 months ago, by lack of control over the money supply. In ordinary English, money was printed. The Government seek to cure inflation, and they have had to embark on a policy of very high interest rates. Consequently, all businesses face acute financial shortages.


A high inflation rate means that a business needs more money to achieve the same volume of sales. A high minimum lending rate means that it is expensive to borrow more money. If those factors are coupled, it becomes clear that any business will face severe financial strain.
The pound is strong because we are fortunate enough to have an oil well in our back garden. Any country with an oil well is attractive to foreign currency. There is nothing that we can do about that. It is a blessing that does not have a completely silver lining. It makes it more difficult to sell abroad. It makes it easier for our competitors to sell goods here. Against that background, all businesses will face a tough year. Everyone must be aware of the dangers of the situation, and of the responsibility that lies on those involved in wage negotiations. If more money is given for the same amount of production, or less production, it can only lead to higher production costs, higher prices, less ability to compete, fewer sales and fewer jobs. All parties involved must bear that lesson in mind. There is a responsibility on Ministers to put that message across clearly. There is a responsibility on management to spell it out—on the shop floor, not sitting in their offices above it all. There is a responsibility on management to ensure that those involved in the business know the situation that faces the company, the consequences for jobs if unacceptable wage claims are pressed,

and the damage done by strike action to the ability of the business to pay.
There is a responsibility on Ministers, management, workers and those engaged in trade union negotiations. The warning should go out loud and clear from this example, on the basis of the facts presented by my hon. Friend. A wage claim of 20 per cent. was pressed in March 1980. The company said that it could not afford to pay, the workers then blockaded the goods leaving the factory, and five weeks later it was all over.
The results include the loss of British aluminium semi-manufacturing capacity, a loss of potential jobs in the companies supplying the raw materials to the factory, a loss of income for the pensioners and pension funds that had invested in the company, and the loss of 900 jobs. There will be less for everyone—less production for the country, less wealth creation, and less for the people who worked in this business who were so sadly misled into taking industrial action to try to secure wage claims that the firm could not possibly stand.
Sadly I join my hon. Friend in agreeing that it is right for him to have drawn this matter to the attention of the House, but equally I believe that all outside the House should note the lessons to be learnt from this sad tale.

Question put and agreed to.

Adjourned accordingly at eight minutes to Five o'clock am.